VeChain and Cardano have grown immensely throughout 2020 and 2021. I’ve been personally following these two for a long time and will summarize the similarities, differences, and which is the better investment in this article.
VeChain has a slight edge over Cardano because Cardano lives in the shadow of Etheruem while Vechain is dominating its sector. Also, Vechain’s native token, VET, is deflationary while Cardano’s ADA has infaltion. Therefore, Vechain is the better investment of the two.
Let’s dive deeper and figure out the details. In the rest of the article, I’ll give you a comprehensive understanding of the two projects and a base to make decisions.
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What are VeChain and Cardano?
Cardano is a direct competitor to Ethereum. It is a blockchain that aims to attract developers to create applications. It is like the internet, hosting all kinds of different programs and platforms that users can interact with. Cardano aims to do this better than the current leader, Ethereum, by improving the technology and philosophy behind the development process. All Cardano’s improvements/uploads are actually peer-reviewed, like science papers.
Cardano’s mission is to improve on what Ethereum has done, and host applications in a safer, faster, more scalable and more decentralized manner, enabling more businesses, governments and people in general, to benefit from blockchain technology.
Vechain is also a blockchain, but with different functions and goals than Cardano. Vechain makes it easier for businesses to count their inventory, track goods all the way back to the producer, and stay on top of all the logistics. Vechain is the supply chain cryptocurrency project, which is one of the best use cases for blockchain technology.
VeChain’s mission is to decrease regulatory burdens and enable businesses to use blockchain to address actual financial and logistical challenges. They enable proof of authenticity for brands, helping the fight against counterfeit goods. I’ve written a beast of an article about why Vechain is a good investment, going into all the details of what it is and why it’s awesome: Read it here.
How are VeChain and Cardano similar?
- Marketplaces. Users can buy, sell, trade, and stake both of these coins on cryptocurrency exchanges around the world.
- Native coins backed. Both VeChain and Cardano have their native cryptocurrencies, VET and ADA respectively.
- Limited Supply. Both of these tokens have a limited maximum supply, 86.7 billion for VET and 45 billion for ADA.
- Staking. Both of these tokens can be staked to earn a reward for helping secure and run the blockchain.
How are VeChain and Cardano different?
- Smart Contracts. Cardano will soon have the smart contract upgrade but VeChain already supports them.
- Consensus Protocol. VeChain uses the Proof of Authority consensus system whereas Cardano utilizes the Proof of Stake consensus.
- Market Capitalization. At the time of writing, Cardano is roughly ten times bigger than Vechain in terms of market cap.
- Burning. VeChain burns 70% of the transaction costs (in Vethor, not VET. Learn more about Vechain coin burns in this article) whereas Cardano burns none.
Tokenomics and Price History of ADA and VET
Both VET and ADA have surged in the past few years, but which has the best historical performance? Also, how are the different inflation rates, and general tokenomics compared to each other?
Let’s zoom out and look at the price movements from January 2020 to the summer of 2021. This will give us a good view of the two coins’ long-term performance and which has done better.
Cardano Performance Since January 2020: Increase of 9525%
Vechain Performance Since January 2020: Increase of 2839%
We see that Cardano has done much better than Vechain. However, this does not mean that it will perform better than Vechain in the future!
In fact, I think the opposite is true, and we’ll get to that soon enough… More about tokenomics first.
Important Difference: Inflation/Deflation Rate
Vehcain does not have inflation, as the rewards for staking it are paid in another coin. This makes Vechain deflationary because people lose their wallets, effectively taking coins out of circulation. This is great for the price of VET, as deflation acts as a demand pressure.
Cardano has inflation. Below you see the planned inflation rate of ADA over time. If you want to read more about this, you can check out this article right here.
The fact that ADA is inflationary and VET is deflationary is a big win for Vechain when measuring them as potential investments. Remember, inflation is downward pressure on the price, while deflation is upward pressure.
Future Outlook for Vechain vs Cardano
I think that Vechain has a brighter future than Cardano for two simple reasons:
- Vechain is dominating its sector, Cardano lives in the shadow of a giant – Ethereum.
- Vechain is partnering up with tons of big companies and institutions, Cardano is lagging behind in this sense.
Now, don’t get me wrong. I think Cardano is a great cryptocurrency. But Vechain is just a little bit better. It also has a lot more room to grow, as its market cap is 10x smaller.
I have speculated a bit on where the prices of these coins might go in other articles. You might want to read these:
Oh, and if you’re investing in Ethereum (like you should) and want to get a sneak peek at my personal investment and trading strategy, read this article:
Conclusion: Vechain Is The Better Cryptocurrency
In my opinion, VET is an incredible investing prospect for traders with long-term perspectives. While ADA has competition from the likes of Ethereum and Solana, VET is quite independent in the crypto market with no such competitors, consequently dominating its sector. Moreover, VET is deflationary, and ADA is inflationary, further cementing VET as the better investment.
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