VeChain’s Tokenomics Overhaul
VeChain is preparing for what might be its most significant change in years. Come December 2025, the network will abandon its long-standing fixed VTHO generation model. Instead, the amount of VTHO produced will directly reflect how much VET is staked across the entire network. It’s a shift from predictability to flexibility, and honestly, I think it makes more sense for a growing ecosystem.
The old system was straightforward but perhaps too rigid. Every VET token generated VTHO at a constant rate of 5 × 10⁻⁹ per second. That translated to about 0.000432 VTHO daily per VET, adding up to roughly 13.7 billion VTHO annually across the network. The new approach throws out that single number and replaces it with a range that could vary significantly based on participation levels.
How Staking Affects Supply
Looking at the numbers VeChain has shared, the difference is striking. If about 2.6% of the total VET supply gets staked (around 2.525 billion tokens), the network would produce approximately 3.86 billion VTHO per year. But if participation jumps to 75% (about 60 billion VET staked), annual VTHO output could reach nearly 19 billion. That’s quite a spread, and it shows how much influence stakers will have over the network’s economics.
What I find interesting is that this new system only rewards VET that’s actually staked. Tokens sitting idle in wallets won’t contribute to VTHO generation anymore. This seems like a deliberate move to encourage more active participation rather than passive holding. It gives validators and their supporters more economic weight within the ecosystem.
The Hayabusa Upgrade Timeline
The transition to this new model is part of VeChain’s broader Hayabusa Upgrade, which represents a fundamental shift from the older Proof of Authority model to Delegated Proof of Stake. The testnet already completed this consensus change back in November 2025, and now the mainnet activation is scheduled for December 2-9, 2025.
During that initial seven-day transition window, VTHO generation will pause completely while the network adjusts to its new structure. After that period ends, the dynamic issuance model kicks in permanently. There won’t be any fixed schedule going forward—each year’s VTHO supply will depend entirely on how much VET is locked in staking at any given moment.
Market Context and Implications
While all these technical changes are happening, VET is currently trading around $0.01579, showing a slight 0.31% decline over the past day. The market seems to be watching these developments closely, though it’s hard to say how much of this news is already priced in.
This upgrade essentially creates a system where network participation directly drives token economics. It’s a departure from the “set it and forget it” approach that many blockchain projects start with. The success of this model will depend heavily on whether it actually encourages the level of staking participation VeChain is hoping for.
I’m curious to see how this plays out in practice. The range between minimum and maximum possible VTHO generation is substantial, which means network activity could have a real impact on the overall token supply dynamics. It’s one of those changes that sounds good on paper, but the real test will come when people start actually using the new system.
