Deep Dive
1. Hayabusa DPoS & Staking Issuance (December 2025)
Overview: This was a major hard fork that changed how VTHO is created. It moved the network to Delegated Proof of Stake (DPoS) and tied new VTHO generation directly to staked VET, rather than passive holding.
The upgrade replaced the old system where simply holding VET in a wallet generated VTHO. Now, VTHO is minted as a reward for users who actively stake and delegate their VET to validators, supporting network security. This change approximately halved the rate at which new VTHO enters circulation, creating a supply constraint.
What this means: This is bullish for VTHO because it makes the token more scarce. With fewer new tokens being created automatically, the existing supply becomes more valuable if demand for transactions stays the same or grows. It rewards active network participants rather than passive holders.
(Bullish)
2. Galactica Dynamic Fee Market (July 2025)
Overview: This protocol upgrade overhauled the network's transaction fee system. It implemented a dynamic fee market modeled on Ethereum's EIP-1559, where a portion of every fee is permanently destroyed.
In this new model, each transaction fee is split into a base fee that is 100% burned (permanently removing that VTHO from supply) and a priority tip paid to validators. This creates a built-in deflationary mechanism that increases with network usage.
What this means: This is bullish for VTHO because it introduces constant buy-side pressure. As more people use the VeChain blockchain for apps and transactions, more VTHO gets burned, which can reduce the overall supply over time and potentially increase its value.
(MEXC News)
Overview: This release introduced the official StarGate staking platform, which changed how users earn VTHO rewards by using NFTs to represent staking positions.
It migrated VTHO generation from the old, passive system to a new staking contract. Users must lock their VET in the platform to receive a staking NFT, which then accrues VTHO rewards. The launch was accompanied by a massive 5.48 billion VTHO bonus reward campaign to incentivize early adoption.
What this means: This is neutral-to-bullish for VTHO because it modernized the reward system, making it more engaging and potentially securing more VET in the protocol. The high rewards attracted significant participation, with 10 billion VET delegated within three months, laying the groundwork for the later Hayabusa upgrade.
(VeChain)
Conclusion
The VeChainThor codebase has undergone a transformative year, shifting VTHO from an inflationary, passively-generated resource to a deflationary asset with staking-driven issuance and fee burns. This architectural pivot aims to create sustainable value as network activity grows. Will on-chain transaction growth accelerate enough to offset the reduced issuance and activate the deflationary burn mechanism?