In this article, I will describe the similarities and differences between VeChain and Chainlink with the hopes of helping you get a better grip on the two projects, and figure out which you think is better. First of all, here’s my opinion:
Chainlink is better than VeChain, as it is less risky and has more potential in the long term. Nevertheless, VeChain is also a solid project with big partnerships in the exciting sector of supply chains, but it is still overshadowed by the potential of Chainlink’s Oracle sector.
Now, I will mention the basics of both projects by also comparing their similarities and differences to derive a solid conclusion on the comparison.
What are VeChain and Chainlink?
VeChain improves supply chain management and provides proof of authenticity for brands. With VeChain’s blockchain solutions, businesses can slap on a QR code on products that can be scanned by potential customers, showing the entire process from manufacturing to selling, proving the authenticity.
For example, you can scan the QR code on a bag of coffee beans to see exactly where this particular bag of coffee was made, how it was made, how it was shipped, how it was packed, etc. Also, it helps keep track of businesses inventory, and other logistical stuff.
You can read about what I think of Vechain in this article: Is VeChain A Good Investment?
Chainlink is the leading “oracle network” by a factor of 20. Oracle networks connect the blockchain world to the real world by feeding data through their decentralized oracles. Basically, Chainlink can feed data from the real world into smart contracts on blockchains, making them much more useful.
Chainlink greatly enhances the use-cases for blockchain tech and is a key player in the entire industry. It has over 600 partnerships and creates more every week. The potential of this sector is mind-bending, as decentralized confirmation of data can be adopted by every other sector in the industry.
You can read about what I think of Chainlink in this article: Does Chainlink Have A Future?
How are VeChain and Chainlink similar?
Marketplaces. Both of these coins can be bought, sold, stakes, or traded on various cryptocurrency exchanges around the world.
Native coins backed. Both of these projects have native coins, as VeChain supports VET coin, and Chainlink supports the LINK coin.
Smart Contracts. Both of these coins support smart contracts.
Supply Limit. They both have a maximum supply, VeChain has a limit of 86.712 billion coins whereas Chainlink has its limit at 1 billion coins.
Low transaction fee. Both VeChain and Chainlink have low fees.
How are VeChain and Chainlink different?
Decentralization. VeChain is more centralized than usual cryptocurrencies. However, Chainlink prioritizes oracle decentralization.
Market Capitalization. Chainlink is almost twice as big as Vechain in terms of market capitalization. (source)
Blockchains. VeChain was previously built on the Ethereum blockchain but it shifted to its own blockchain in 2018. Chainlink is built on the LINK blockchain.
Usability. VeChain is specifically designed to enhance supply chain management and business processes whereas Chainlink aims to provide a network of decentralized oracles linking the real world with the blockchain world.
Consensus Mechanism. VeChain uses a Proof of Authority consensus mechanism whereas Chainlink uses a Proof of Stake consensus mechanism.
Historical Performance of VET and LINK:
Let’s take a look at how these two have performed historically, going back to January of 2020.
Chainlink: Historical Performance
Chainlink has increased 1350% since January of 2020. Every dollar invested back then would turn into 14.5 bucks today:
VeChain: Historical Performance
We see that VeChain has outperformed Chainlink, posting a 1940% return. Every dollar invested back then would be 20.4 bucks today.
What we see above is that VeChain has outperformed Chainlink in the sense of returns produced. However, let’s also take a look at how had their corrections were in the bad times, to figure out which one is riskier (historically speaking).
Chainlink: Historical Corrections
Chainlink has had three major corrections since the beginning of 2020. Two above 70% and one below 70%. The average size of the corrections is 70.66%:
VeChain: Historical Corrections
VeChain has had much worse corrections than Chainlink, with one of them as deep as 85%. They are also quicker than those we see on the Chainlink chart above. The average correction of the three below is 77%.
In general, we see that Vechain corrects harder and faster than Chainlink, historically speaking.
Oh, by the way:
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Conclusion: Chainlink is better for investors, VeChain is better for traders
Fundamentally, Chainlink is the more exciting project in my opinion. The sector of decentralized oracle networks has the potential to grow into tens of trillions of dollars one day, and Chainlink is the number one player by a factor of 20.
Historically speaking, Chainlink is also less volatile than VeChain, doing much better in corrections.
For these reasons, Chainlink is the best investment of the two. For traders, VeChain is a great opportunity as it offers higher returns (historically speaking).
Personally, I hold Chainlink for the long term and swing trade VeChain with a 3-6 month perspective.
To learn how I personally trade and invest, check out this article.
(all charts are made with tradingview, and in case you missed the disclaimer: This is not financial advice. It is just my personal opinion. Do your own research!)
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