Exclusive Interview with Vechain Founder Sunny Lu: Old Soldiers Never Die, Hope Never Fades

When an eight-year veteran still on the front lines chooses to do the hard but right thing.

Written by: ChandlerZ, Foresight News

The ETF channel, regulatory guidelines, and institutional capital are shifting the crypto industry from a retail-driven speculative cycle to a structured institutional cycle. In this process, VeChain is turning its long-standing slogan "Mass Adoption" from a concept into systems and products: on one hand, the "Renaissance" series of upgrades is restructuring governance and incentives; on the other, Stargate is bringing ordinary users into the consensus layer and building a foundation for capital and risk control with compliant institutions. This path does not chase hype, but instead focuses on patience and compound returns.

Sunny Lu's judgment is straightforward: in the long run, doing the hard but right thing is truly the "Right thing to do" for the industry.

From Retail Cycle to Institutional Cycle

Over the past two years, as compliance paths have become clearer and institutions have entered more systematically, the participants and liquidity structure of the crypto market have shifted. The emotionally driven cycles once dominated by retail investors are now being extended and softened by institutional allocation behaviors, directly manifesting as a shift from narrative-driven to utility-driven, and from retail markets to institutional markets.

The European Union's Markets in Crypto-Assets Regulation (MiCA) will be fully effective as of December 30, 2024, and the United States, under the Trump 2.0 administration, is firmly supporting crypto assets, stating it will ensure the US becomes the "capital of crypto assets."

This year, the US Securities and Exchange Commission (SEC), under its new chairman, launched "Project Crypto," which for the first time explicitly aims to modernize financial markets within the intersectional framework of digital assets and artificial intelligence. The core of this plan is to bring securities rules on-chain, using transparent and verifiable on-chain mechanisms to support market operations. The plan includes supporting Super App platform innovations, enabling trading, lending, and staking to operate in parallel under a unified regulatory framework; relaxing custody rules to allow investors and brokers to freely choose diversified custody solutions, among other priorities.

Regulatory signals and capital market tools (such as the ETF channel) in Europe and the US have lowered the entry barriers for traditional institutions. "Institutional capital will significantly extend the bull market cycle and make it more certain," Sunny Lu told Foresight News. "This will be the norm in the next phase."

At the same time, the scale of institutional capital, governance experience, and compliance requirements will in turn shape the design boundaries of public chain ecosystems. In other words, the certainty of the next phase comes from the linkage between institutionalized participation and sustainable utility, not from "the speed of storytelling."

In terms of entry forms, the industry is also leaning more towards Super App-style experiences. In Sunny Lu's view, using Web2-style interactions to cover Web3 functions maximally weakens pain points such as key management and cross-app switching. Wallets are no longer just asset containers but are seen as comprehensive service gateways; this is also the key experiential threshold for the public to enter the crypto world.

Sunny Lu emphasizes that wallets and key management remain the biggest barriers to mass adoption, and that engineering solutions must be used to lower the threshold; otherwise, "Mass Adoption" is out of reach.

Independent Track and the Execution Framework of "Mass Adoption"

In its eight years since founding, VeChain's fundamental approach has never changed: real-world utility + mass adoption. In the crypto industry, where trends shift frequently, this option is both "counterintuitive" and "countercyclical."

Sunny Lu summarizes this long-termism as "Pick right, choose long, iterate extremely fast," meaning: pick the right direction, stick to the long term, and iterate products fast enough to support the long-term vision:

• Pick right: Choose the right direction—establish real applications for the public and enterprises as the foundation;
• Choose long: Use a long-term mindset to deal with the time costs of compliance, governance, and ecosystem building;
• Iterate extremely fast: Rapid iteration and delivery in products and mechanisms.

In execution over the past two years, VeChain has broken down its strategy into three parallel paths:

• Decentralization of protocol and governance ("Renaissance" series upgrades);
• Application and user growth (Stargate and other gateway products);
• Compliance and institutional collaboration (institutionalized division of labor with custodians, market makers, asset managers, etc.).

The key here is to prepare resources in advance. In August 2025, the VeChain Foundation announced partnerships with digital asset custodian BitGo, market maker Keyrock, and asset management company Franklin Templeton. This collaboration will inject core capabilities such as custody, liquidity management, and tokenized financial instruments into the VeChain ecosystem, accelerating its expansion in the institutional market.

The VeChain Foundation stated that the partnership with the three institutions coincides with the implementation of the VeChain "Renaissance" upgrade, combined with the Hayabusa tokenomics optimization, to provide an institutional participation environment compliant with EU MiCA regulations while ensuring network security and decentralization.

Sunny Lu also noted that institutional collaboration not only provides financial, custody, and market-making infrastructure, but also brings compliance and risk control industry practices into public chain governance. This means institutions are not just buyers, but ecosystem builders, marking a clear distinction from the short-term path of "pure financial narrative."

Implementing "Everyone Can Participate" Through Institutionalized Design

VeChain's development can be divided into three clear stages, each marked by a white paper as a milestone.

In 2017, VeChain started with its first white paper, focusing on infrastructure construction. At that time, public chains were still in the experimental and conceptual stage, and VeChain's goal was to bring real-world business logic onto the blockchain, laying the underlying architecture for enterprise applications. In 2019, VeChain began transitioning to real-world implementation, focusing on enterprise-level application scenarios. VeChain partnered with companies such as Walmart China and BYD to explore commercialization in areas such as food safety, supply chain transparency, and carbon footprint management.

The second stage was marked by the release of the white paper "Web3 for Better," with VeChain establishing sustainable development as its core narrative. The project launched VeBetterDAO, using incentive mechanisms to guide users to adopt more environmentally friendly and responsible behaviors in daily life. To date, the ecosystem has attracted about 2.7 million users and has more than 40 applications, laying the groundwork for mass adoption on both the user and application sides.

Now, VeChain is entering a new cycle—the "Renaissance" upgrade phase. This stage will restructure governance and incentives, enabling enterprises, developers, and ordinary users to form a truly collaborative network on the same chain. Its first key milestone is the launch of the Stargate platform on July 1, marking VeChain's transition from an enterprise blockchain to a public chain ecosystem with mass participation.

"Renaissance": Dual Restructuring of Governance and Incentives

Sunny Lu told Foresight News that "Renaissance" is not a stopgap measure, but a series of upgrades launched after years of accumulation and aligned with the compliance window, with two main goals:

• More thorough decentralization: enabling nodes, the community, and ordinary token holders to have actionable participation roles;
• Preparing for scale: ensuring that protocol-level governance and incentives can support higher user and asset density.

The upgrade will proceed in stages: the first phase was completed in June, the second phase is planned for December, and the third phase is expected to take place between July and September of the following year. The relevant designs are explicitly aligned with EU MiCA compliance requirements, and in March 2025, VeChain completed compliance alignment for its dual tokens across all 27 EU countries, providing an institutional foundation for its "regular army" status.

The core change in the incentive mechanism is to more closely tie rewards to governance contributions, shifting from passive distribution (holding tokens yields rewards) to contribution-based distribution ("only by participating in decentralized construction and maintenance, such as running nodes or delegating, can one earn rewards"). VeChain believes this better fits the compliance environment and can curb "free-riding" and "idle mining" behaviors.

At the same time, the threshold and capacity range for validators will be broadened. Each node's staking range will be from 25 million VET to 600 million VET, introducing competition and incentivizing those who want higher returns to contribute more, thus making incentives compatible with market liquidity.

Stargate: Hiding Complexity "Out of Sight"

Stargate, launched in July, is defined as an "important gateway tool for protocol operation." Its design logic is to use NFTs as "interaction credentials":

• Users stake VET into a contract (subject to audit and security architecture) and mint an NFT;
• With the NFT, users can select or switch the validator they wish to support on-chain, directly participating in consensus maintenance;
• Direct rewards: the protocol automatically distributes block rewards proportionally to validators and delegators, "eliminating intermediaries." The ratio mentioned in the interview is 30%:70% (validator: delegator).

Sunny Lu said this design aims to solve three things at once, including:

• Operational threshold: abstracting the complexity of "running nodes and managing servers" into "operating with an NFT";
• Asset security: contracts do not hold private keys, and users do not hand assets to third-party intermediaries;
• Transparent rewards: rules are written into the contract, distributed per block, and allocated automatically.

"What we want is a kind of decentralization that everyone can participate in," said Sunny Lu.

Institutions as the "foundation," the middle layer as the "connector," and applications as the outreach

VeChain's ecosystem now resembles a well-structured city. The base is a solid foundation, the middle is a connecting transportation system, and the outer layer is a bustling application space. The entire system forms an intertwined structure of three tool stacks and three types of participants, each layer assuming different functions but evolving collaboratively within the same economic loop.

The bottom developer layer is like the city's foundation, providing stable support for the upper structures. VeChain opens up its core libraries, interfaces, and toolsets through VeChain Kit, allowing developers to directly access underlying protocol capabilities. The goal of this layer is not to create complexity, but to lower the threshold for innovation, enabling more enterprises and teams to quickly build specific applications on the existing framework.

The middle layer is the connection layer. It translates technical logic into user behavior and serves as a bridge from tech-savvy individuals to business experts. Stargate was born from this idea, allowing users who are unwilling or unable to run their own nodes to still participate in network operation in a decentralized way. Through Stargate, users stake assets, receive NFTs, and participate in delegation and consensus maintenance—all encapsulated into a simple interactive experience, with the underlying complexity hidden. This layer is both a tool and an entry point.

The outermost layer is the experience layer for ordinary users. VeChain is evolving its wallet into a new form called V World, aiming to make it not just an asset container but also a hub for comprehensive services. Here, account systems, financial tools, and application markets are integrated into a unified interface, gradually approaching the "Super App" model, thus carrying the functional density of Web3 with the smoothness of Web2.

Centered around these three tool stacks, the ecosystem brings together three types of participants. Institutional nodes such as BitGo and Keyrock are no longer just external investors but are infrastructure builders directly running validation, providing custody, and market-making services. They bring capital, risk control, and compliance experience into on-chain governance, becoming the institutional foundation for ecosystem stability. Developers and enterprises use open tools to build vertical applications, from supply chain to ESG, from carbon data to retail points systems. Ordinary users participate in staking and consensus via NFTs and Stargate, completing the final value closure through their actions.

According to data disclosed by Sunny Lu, there are about 46 applications on the application side, about 5 million registered users, and cumulative on-chain actions of about 36–40 million; about 12,000 Stargate-related NFTs have been minted, corresponding to about 6 billion units of VET staked. These numbers are not yet massive, but they demonstrate a nascent, well-formed structure. Institutions provide institutional and liquidity support, the protocol layer ensures openness and security, and the user side enters the network through simplified product design, together forming a complete closed loop from infrastructure to application outreach.

This is exactly the leap VeChain wants to achieve: from infrastructure (infra) to application (app), from narrative to utility.

Doing the Hard but Right Thing in the "New Certainty"

VeChain's growth logic has always been to "begin with the end in mind." Internally, the team has set the end of 2025 as a key convergence point:

— On the technical level, complete subsequent upgrades such as Hayabusa, bringing the "Renaissance" series to a scalable and compliant final state;

— On the network level, increase total staking to about 30 billion VET, nearly ten times the current scale;

— On the user level, reach 20 million active accounts and form over 100 application scenarios within the ecosystem;

— On the market level, attract more institutional nodes and compliant exchanges to join the network, jointly establishing an "institution-friendly" liquidity system.

These numbers are a reverse roadmap for organizational and product synergy. Technical upgrades must support higher asset and user density; compliance progress must align with institutional governance, custody, and market-making collaboration; and on the user side, product design must hide Web3 complexity layer by layer behind a Web2 experience, allowing users to participate in decentralization in an almost seamless environment.

In Sunny Lu's view, the core of this system remains the principle of execution—Pick right, choose long, iterate extremely fast.

Today's crypto market is at a split moment. On one side are the fast-money narratives represented by Meme coins and low-quality projects, characterized by intense emotions and short cycles; on the other, a few projects are trying to use technology, systems, and compliance as leverage to build a more solid order layer for the industry. The former generates hype through speculative narratives, while the latter accumulates certainty through structural optimization. VeChain clearly belongs to the latter.

In Sunny Lu's view, the sustainability of future public chains no longer depends on the triad of market cap, traffic, and buzz, but on whether systems and products can connect governance participation, value distribution, and security compliance in a closed loop. VeChain chooses to structurally strengthen this linkage, binding governance rights with revenue rights, allowing participants' contributions to directly translate into incentives, and lowering operational barriers through NFTs and gateway tools, making decentralization a process the public can participate in. Meanwhile, the entry of institutional nodes gives this system greater institutional constraint. Compliance and risk control are no longer passive external requirements but are embedded in the underlying logic of protocol operation, gradually bringing the entire network closer to the security and transparency standards of traditional financial systems.

This path is not flashy, but it is explanatory; it does not win by being aggressive, but by being steady. VeChain minimizes idle output at the technical level, encourages earning by doing; at the ecosystem level, it makes institutions the foundation supporting the network, bringing capital, rules, and trust together; at the product level, it wraps Web3 participation in a Web2 experience, hiding complexity beneath usability; at the strategic level, it remains restrained, not chasing short-term narratives and emotional swings, but using utility as the long-term metric.

In a market dominated by fast-money sentiment, this rhythm stands out. The frenzy of Meme coins and speculative booms has made "doing the right thing" less sexy, while VeChain's pace is more like swimming against the current.

Slow, but with its own certainty.

Sunny Lu describes himself as "a veteran still on the front lines." In eight years, he has witnessed countless narrative rises and falls and has seen the real industry watershed. He continues to do the hard but right thing during restless cycles and accepts the time cost.

For him, long-termism is not a slogan. It requires continuous progress under multiple constraints of mechanisms, technology, and compliance; it requires patience to do real work outside the clamor for quick money. To accomplish hard but right things one by one and accept the time cost required. This is the true weight of "Mass Adoption."