Veles: Open Decentralized VPN and Anonymous Network Ecosystem

What is Veles

Friends, imagine that when we browse the internet, it's like driving on a public road. There are many cameras on this road, as well as some barriers that might restrict us from going certain places or record our whereabouts. The Veles project (abbreviated as VLS) aims to build us a more private and freer “digital highway.”

Simply put, Veles is an open-source blockchain project whose core goal is to help everyone better protect their privacy online, freely access information, and resist censorship. It leverages decentralized blockchain technology to build a self-sustaining network that is not easily disrupted or censored.

Currently, Veles already provides some practical services, such as a decentralized VPN (dVPN), which is like putting an invisibility cloak on your internet connection, making your online activities harder to track. It also offers tunneling technology and decentralized recursive DNS services, all designed to make you more hidden and secure in the digital world. In the future, they also plan to launch decentralized instant messaging tools and trusted software build services, making our digital lives more autonomous.

The VLS token is the “pass” on the Veles platform, and you need it to use the various products and services provided by the platform. The project started around 2018 or 2020.

Quick Facts:
Blockchain: A decentralized distributed ledger technology where data is stored in blocks and linked together, making it tamper-resistant.
Decentralized VPN (dVPN): A virtual private network built using blockchain technology. Unlike traditional VPNs, it does not rely on a single server, thus enhancing privacy and censorship resistance.
DNS (Domain Name System): The system responsible for converting the web addresses we enter (like google.com) into IP addresses that computers can recognize.

Project Vision and Value Proposition

The vision of the Veles project is very clear: it hopes to enhance people’s freedom to access information, effectively prevent internet censorship, and greatly improve the anonymity of online communication. Just like the “digital highway” mentioned earlier, Veles wants this road to be unobstructed and free from surveillance.

They believe that many current internet services, whether centralized commercial services or volunteer-run networks, are vulnerable to abuse and censorship. For example, a centralized VPN provider might be forced to log user data or restrict services under pressure. Volunteer networks may struggle to sustain themselves due to a lack of economic incentives.

Veles’ solution is to combine blockchain technology with game theory (a mathematical theory that studies interactions between decision-makers) to build a self-supporting, ultimately autonomous network. In this way, participants in the network are economically incentivized to maintain it, making it more robust and resistant to external interference and censorship.

Unlike other similar projects, Veles not only utilizes blockchain’s innovative incentive mechanisms but also incorporates many time-tested anonymization technologies, such as OpenVPN. It’s like combining the latest engine with the most reliable car body—offering both innovation and reliability.

Technical Features

The technical core of the Veles project is its independently developed Veles Core blockchain. To make this “digital highway” run fast and smoothly, they have adopted several unique technologies:

Consensus Mechanism: Multi-algorithmic Proof-of-Work (PoW)

Veles uses a consensus mechanism called “multi-algorithmic proof-of-work.” In simple terms, miners can compete to package blocks using multiple different computational methods (algorithms), not just one. It’s like building a road with not only bulldozers but also excavators, rollers, and other tools, making it harder for any single tool to dominate.

This design has several advantages:

• Resisting 51% Attacks: By combining multiple algorithms and a dynamic block reward mechanism, Veles can better defend against “51% attacks” (where an entity controls most of the network’s hash power and could potentially alter transactions).


• Fair Mining: Block rewards are dynamically adjusted based on the hash power of each algorithm, ensuring that miners using different algorithms have relatively fair mining opportunities and preventing speculative mining on low-cost algorithms.

Quick Facts:
Proof-of-Work (PoW): A consensus mechanism that validates transactions and creates new blocks by solving complex mathematical problems, requiring significant computational resources.
51% Attack: Refers to a miner or mining pool controlling more than 50% of a blockchain network’s hash power, theoretically allowing them to manipulate transactions and block order.

Masternode Network

The Veles network also utilizes the concept of “masternodes” to provide distributed services. Masternodes can be understood as “advanced nodes” in the network; they not only help maintain the network but also provide specific services, such as running dVPN, decentralized DNS, or Shadowsocks tunnels. In return, masternode operators receive service fees and block rewards.

• Collateral Requirement: To become a Veles masternode, you need to stake 500 VLS tokens.


• Reward Mechanism: Masternodes can receive 9% of the block rewards.


• Future Development: A unique masternode tiering and rating system is under development, allowing masternode operators to specialize based on their resources.

Quick Facts:
Masternode: In some blockchain networks, a special type of node that requires staking a certain amount of tokens and provides additional services (such as instant transactions, anonymous transactions, etc.), receiving extra rewards in return.

Security and Efficiency

Veles is designed to provide a secure and reliable blockchain capable of resisting 51% attacks and even potential threats from future quantum computing. At the same time, it aims to achieve fast transactions and extremely low transaction fees.

Flexible Service Layer

The Veles network adopts a multi-layer decentralized network architecture based on the masternode concept, building a flexible and robust service layer on top. This ensures that all services provided by the Veles network operate redundantly and in a decentralized manner, with a focus on service quality and availability.

Tokenomics

The token of the Veles project is VLS, which is the cornerstone of the entire ecosystem.

Basic Token Information

• Token Symbol: VLS


• Main Uses: VLS is a utility token on the Veles platform, mainly used to access and use various services provided by the platform, such as decentralized VPN, tunneling services, and decentralized DNS. In the future, as more services are launched, VLS will also be used for these new services.


• Maximum Supply: The maximum supply of VLS tokens is 2,500,000.


• Current Circulating Supply: According to different data sources, the current circulating supply is approximately between 1,290,083 and 1,395,589.

Issuance Mechanism and Inflation/Burn

• Fair Launch: The Veles project adopted a “fair launch,” meaning there was no developer premine, no ICO (Initial Coin Offering), or other forms of fundraising.


• Initial Distribution: The first block of the Veles chain was mined on November 6, 2018, generating 50,000 VLS, which was used for early adopter token swaps.


• Dynamic Halving and Rewards: Veles uses a dynamic, non-linear halving system linked to the actual token issuance rate, aiming to ensure a low inflation rate and long-term project sustainability. At the same time, block rewards are also dynamic, adjusted according to the hash power of different algorithms to promote a fairer mining environment.


• Development Fund: To support early project development, a development fund receives a portion of the block rewards. This proportion decreases annually, from an initial 5% down to 0% over five years. Currently, the proportion is about 4.65%.

Quick Facts:
ICO (Initial Coin Offering): A way for cryptocurrency projects to raise funds by issuing their own tokens.
Premine: The act of developers or teams mining a portion of tokens before the cryptocurrency is officially released to the public.
Halving: An event where mining rewards are cut in half, usually after a certain number of blocks are mined, to control the issuance rate and total supply of tokens.

Team, Governance, and Funding

Team

The Veles project is developed by an anonymous team. Their main founders and developers use pseudonyms, such as Altcoinbaggins and MDFKBTC. Anonymous teams are not uncommon in the crypto space, but for investors, this usually means higher risk, as the backgrounds and responsibilities of team members are hard to trace.

Governance

The Veles project is committed to open governance. Their goal is to fully transfer the development and management of the project to a decentralized organization, which will be fairly controlled by all participants who contribute to the network. This means that community feedback and opinions play an important role in the project’s development.

Quick Facts:
Decentralized Autonomous Organization (DAO): An organization run by smart contracts, with rules encoded on the blockchain and decisions made by community member voting.

Funding

The Veles project did not conduct an ICO or any other form of fundraising at launch, nor was there a premine. Its development funding mainly comes from a portion of the block rewards allocated to the development fund, which gradually decreases over time.

Roadmap

Since its launch in 2018, the Veles project has gone through some important milestones and has plans for the future.

Key Historical Milestones

• November 6, 2018: The first block of the Veles chain was mined.


• Early Days: 50,000 VLS token swaps were conducted for early adopters.


• VCIP01 Activation: After 50,000 blocks were mined, the project transitioned from a slow PoW phase to a full PoW reward phase.


• Q1 2020: Decentralized VPN (dVPN) public testing was conducted.


• Veles Core v0.17 "Aged Amnesia" Release: This version significantly increased block rewards, introduced a non-linear halving mechanism, balanced dynamic rewards, and adjusted masternode and development team reward proportions.


• Veles Core v0.18 "Blockchain Baracuda" Release: This version rebased the codebase on Bitcoin v0.18, laying the foundation for future hardware wallet support, and reduced masternode collateral from 2000 VLS to 500 VLS.

Future Plans (some may have been implemented or adjusted)

• Proof-of-Stake (PoS) Consensus Mechanism: The Veles team once planned to introduce a PoS consensus mechanism to supplement PoW and enhance the network. However, due to multiple vulnerabilities found in existing PoS implementations, this plan has been suspended until the team develops a sufficiently secure alternative algorithm.


• Privacy and Instant Transaction Features: Plans to activate PrivateSend and InstantSend features to enhance transaction privacy and speed.


• Ecosystem Improvements: Plans to launch an updated project website, redesigned block explorer, provide real-time data and high-load backend services, and offer multilingual whitepapers and websites.


• New Services: Plans to gradually implement more services, such as a decentralized instant messaging platform and trusted software builds.


• Masternode System Upgrade: A unique masternode tiering and rating system is under development.

Common Risk Reminders

All blockchain projects come with risks, and Veles is no exception. When considering any activities related to Veles, please be sure to understand the following points:

Technical and Security Risks

• PoS Delay: The project originally planned to introduce a Proof-of-Stake (PoS) consensus mechanism, but this was delayed due to vulnerabilities found in existing PoS implementations. This shows the team’s emphasis on security but also means there is uncertainty in the evolution of the consensus mechanism.


• Anonymous Team: The core development team is anonymous. While this is common in crypto, it may make it harder to hold the team accountable in the event of major issues.


• Code Audit: Although the project is open source, without independent third-party security audit reports, users must evaluate the code’s security themselves.

Economic Risks

• Liquidity Risk: According to some reports, the 24-hour trading volume of VLS tokens may be very low, even zero. This means buying and selling VLS tokens may be difficult, and insufficient liquidity can affect price stability.


• Price Volatility: The cryptocurrency market itself is highly volatile, and the historical price of VLS tokens also shows significant fluctuations. Past performance does not represent future results.


• Insufficient Market Depth: Some reports show insufficient market cap data for VLS. This may mean the project receives less market attention or has a small market size, making it susceptible to large trades.


• Fierce Competition: The decentralized VPN and privacy protection fields are highly competitive, and Veles needs to keep innovating to remain competitive.

Compliance and Operational Risks

• Regulatory Uncertainty: The global regulatory environment for cryptocurrencies is still evolving, and future policies may impact the Veles project and its tokens.


• Challenges of Decentralized Governance: Although the project is committed to decentralized governance, achieving truly efficient and fair decentralized governance is a complex and challenging process.

Please Note: The above information is for project introduction only and does not constitute any investment advice. Cryptocurrency investment is high risk; please make decisions cautiously after fully understanding the risks and conducting independent research.

Verification Checklist

To help everyone better understand the Veles project, here are some important verification channels:

• Block Explorer: Since Veles has its own blockchain, you can visit its block explorer to view transaction records, block information, and network status: explorer.veles.network


• GitHub Activity: Checking the activity of the project’s codebase is an important way to assess its development progress. You can visit Veles’ core codebase and whitepaper repository:
  
  • Core Codebase: github.com/velescore/veles
  
  
  • Whitepaper Repository: github.com/velesnetwork/whitepaper
  
  


• Official Website: Get the latest project information and official announcements: veles.network


• Whitepaper: Learn more about the project’s technical details and vision: Veles Core Whitepaper (PDF)

Project Summary

The Veles project (VLS) is an open-source initiative dedicated to enhancing internet privacy and information freedom through blockchain technology. It aims to build a censorship-resistant, economically self-sustaining decentralized network, currently providing decentralized VPN, tunneling, and recursive DNS services. The project adopts a multi-algorithm proof-of-work consensus mechanism and a masternode network to improve security and service distribution efficiency. The VLS token, as a utility token, is used to access platform services, and its tokenomics focus on fair launch, dynamic rewards, and long-term sustainability. Although the team is anonymous, the project is committed to open governance and has published a detailed roadmap, including future plans for PoS consensus (though currently postponed).

In summary, Veles is an ambitious project aimed at addressing core issues of internet privacy and censorship. By combining blockchain incentive mechanisms with mature anonymization technologies, it seeks to provide a safer and freer online environment. However, like all crypto projects, it also faces risks such as technological development, market liquidity, an anonymous team, and regulatory uncertainty. For anyone interested, it is strongly recommended to conduct in-depth research and risk assessment using the links in the verification checklist above.

Please note, all of the above is for informational sharing only and does not constitute any investment advice.