Objective

A proper blockchain governance system needs transparency and operational efficiency which enables continual and rapid innovation. In order to achieve the main goal of operating a decentralized public blockchain with the capacity to scale and at the same time complying with regulators, governments and to meet the needs of large enterprises, VeChain aims to improve its governance model with the ability for continuous iterations alongside rapid progression in ecosystem development.

It is important that such a governance model is both efficient and cost-effective, while resulting in consensus and decisions that balance the views of all stakeholders of the blockchain. The Steering Committee (“SC”) of the VeChain Foundation, elected by all stakeholders in the ecosystem every two years, facilitates the efficiency of decision making and ensures the fairness and effectiveness of the execution on fundamental matters that require all stakeholders’ decision, as well as executing all other decisions that are vested to the SC as according to the Governance Charter.

At the early stage of the VeChain ecosystem, it is important that Steering Committee Members (“Members”) share the vision of creating a distributed business ecosystem on top of the VeChainThor blockchain and at the same time represent various stakeholders in the ecosystem. Hence, with the first term of the VeChain Foundation Steering Committee coming to an end on June 30th 2020, we introduce the following process of the 2nd term Steering Committee election.

Criteria And Eligibility Of SC Member Candidates

As determined by the current Steering Committee, the size of the 2nd term Steering Committee will remain as seven. According to the VeChain Foundation Governance Charter, SC member candidates are nominated based on three categories:

Existing SC members who decide to run for the next term Candidates (up to three) nominated directly by the Foundation nomination committee Candidates who publicly announced their intentions to run for the 2nd term Steering Committee member

The total number of candidates from the above three sources can not exceed 14 in the final all-stakeholders voting.

For candidates in all three categories above, before expressing the intention to run as a candidate to be a Steering Committee member, an applicant must meet the following prerequisites:

Announce the intention to run for the SC member by publicly disclosing his/her real name

Minimum age of 21 years old

Is not a “disqualified person” according to 4.2.1 Size, Composition and Criteria of the Governance Charter

According to the VeChain Foundation Governance Charter, SC member candidates are required to meet the following qualitative criteria:

Integrity, objectivity, sound judgment and leadership Relevant expertise and experience required to offer advice and guidance to the development strategy of the Foundation The ability to make independent analytical inquiries, collaborate effectively and contribute productively to the Steering Committee’s discussions and deliberations A commitment to enhancing the long-term value of the VeChainThor Blockchain for stakeholders An understanding of the Foundation and blockchain operation, strategy and challenges The willingness and ability to devote adequate time and effort to Steering Committee responsibilities and to serve on Functional Committees at the request of the Steering Committee

In addition, as part of SC members’ job role, each member is required to oversee a functional committee which fits his/her field of expertise. SC members are expected to provide strategic guidance on the operation and continuous development of the VeChain Foundation organization, blockchain technology and ecosystem. Members usually represent the VeChain Foundation in various occasions such as professional associations, academic organizations, industrial forum, technical conferences and so on, in which they should be capable of elaborating VeChain’s strategy and vision and bringing the resources to help the growth of the ecosystem.

What Is The Role Of Steering Committee Members?

The Steering Committee represents the VeChainThor blockchain stakeholders’ interests in the long-term development of the technical infrastructure, business expansion, and VET value enhancement. The Steering Committee is responsible for establishing the general oversight and framework, including the design of the operating rules of the blockchain that are intended to achieve these goals. The proposed oversight and framework for these goals would then be implemented by the functional committee teams. Steering Committee members except for members from the VeChain team will receive a fixed amount of VTHO tokens as compensation, and the Foundation will cover travel expenses and accommodation for members to attend board meetings, except for members that are located directly at the city in which the meeting would be held.

Principle responsibilities of the Steering Committee are to:

Propose and organize all stakeholder voting events for fundamental issues of the VeChainThor Blockchain Execute the on-chain governance operations and ensure proper decision making process is followed Review, approve, and monitor the Foundation’s major strategic, technical, financial, and business activities Provide strategic guidance based on the report of the functional committees in various areas Review, modify and approve the governance principles of the Foundation Review, approve and monitor the Foundation’s annual budget, financial status including VET holdings, use of proceeds and its major transactions Review, approve and monitor the procedure of nomination and election of the Steering Committee members, functional committee chairs and the General Secretary of the Foundation Review, approve and monitor the operation model of VTHO (operating cost basis of the VeChainThor Blockchain) and valuation model of VET

The Steering Committee members meet at least quarterly. In addition to the regularly scheduled meetings, unscheduled meetings may be called, upon proper notice, at any time to address specific needs of the Foundation. Members are expected to attend and participate in the quarterly meetings in person. In case of any special circumstances that do not allow the member to attend in person, the member should attend telephonically and notify the designated supporting administrative staff or the General Secretary in advance of the meeting.

As the governing body of the VeChain Foundation, each Steering Committee member holds a VeKey device which stores one of the addresses that are authorized to conduct on-chain governance operation, such as modification of Authority Masternodes, modification of technical on-chain parameters. Members are responsible to securely keep their VeKey and conduct on-chain governance operations in a timely manner as requested.

On the other hand, as a representative of the VeChain Foundation, SC members are obliged to keep the information discussed in the meetings confidential and not to provide any public comment that could potentially impact the market.

Overview Of The VeChain Foundation Steering Committee Election Process

An election for the VeChain Foundation Steering Committee happens every two years. The next term of the Steering Committee starts from July 1, 2020.

The planned timetable of the VeChain Foundation 2nd term Steering Committee election process

February 2020 — Candidates of all the three categories mentioned above announce their intentions to run and make declaration on the VeChainWorld forum.

February to March 2020 — Eligible candidates to promote their ideas and vision for the VeChain ecosystem; Candidates or the community may organize AMAs, presentations, debates at this stage.

March 2020 — The Foundation holds the first phase all stakeholders voting (“first phase voting”) on the VeVote platform to vote on candidates of Category 3 to eliminate extra candidates (if any) based on the Steering Committee composition. The first phase voting also serves the purpose to test the approval rating for Category 3 candidates.

April 2020 — The Foundation holds the second phase all stakeholders voting (“second phase voting”) on the VeVote platform to determine the category 3 candidates that enter the shortlist for the final phase voting.

May 2020 — The Foundation holds the final phase all stakeholders voting (“final phase voting”) on the VeVote platform to elect the 2nd term Steering Committee from the shortlist.

End of May 2020 — The Foundation counts the stakeholder votes and announce the 2nd term VeChain Foundation Steering Committee members.

June 2020 — Steering Committee handover.

July 1 2020 — Inauguration Day of the 2nd term VeChain Foundation Steering Committee.

The actual dates may be subject to change as the Foundation operation team deems appropriate.

2. How do I announce the intention to run?

Starting from today, eligible applicants should announce the intention to run for the 2nd term Steering Committee member candidates by creating a post in the VeChainWorld forum that strictly follows the requirements in the Appendix.

The declaration of intention by eligible candidates should encompass the following matters, of which the Appendix provides detailed templates:

A declaration of willingness to enter the election and the association (if any) with Authority Masternodes, developers, enterprise users, and business partners (which determines if the applicant is qualified as an independent member) A detailed resume/CV with information about identification, profile, education, experience, skills, professional certification, accomplishments A personal (strategy/vision) statement

For Category 3 candidate applicants, the declaration of intention should be first posted as a Forum Thread in the “General Discussion” section of the VeChainWorld discussion forum website. The Foundation operation team will review it to ensure the applicant passes the KYC and meet the basic requirements before moving the applicant’s declaration of intention to the “2nd Term Steering Committee Election” section.

The declaration of intention of Category 1 & 2 candidates will be posted directly in the “2nd Term Steering Committee Election” section because their identities and background are pre-assessed by the Foundation team.

3. Declaration of intention, multi phased voting

The election process begins with applicants and candidates in all three categories announce their intentions to run for the 2nd term VeChain Foundation Steering Committee in the VeChainWorld Forum. Candidates of Category 1 & 2 who are pre-assessed by the nomination committee will automatically enter the final election shortlist. The Foundation nomination committee will independently source the candidates of Category 2, and the Foundation team may reach out to applicants who publicly express the intention to run for the SC members to be directly nominated by the Foundation for the final shortlist if the applicant is deemed of high value to the VeChain ecosystem.

Category 3 candidates, after passing the Foundation operation team’s preliminary review, need to be elected in the first phase and second phase voting before entering the shortlist for final phase voting together with the Category 1&2 candidates.

In the first phase, depending on the number of eligible candidates in Category 3 by then, the first phase voting may eliminate a number of candidates in addition to testing the approval rating of the candidates. The Foundation may invite candidates with high approval ratings to join an online debate session following the first phase voting.

Stability is critical in the early stage of the VeChain ecosystem, so the candidates in Category 3 who get elected in the first phase voting need to win at least 15% of the voting authority of the casted votes in the second phase voting before making to the shortlist for the final phase voting. Final rules of the second phase voting will be detailed in the voting requirement which will be announced in advance.

In the final phase, all stakeholders will cast votes on the candidates in the final shortlist and the seven candidates, in accordance with the Steering Committee composition rule, who receive the most voting authority of the casted votes will be elected for the 2nd term Steering Committee.

All the above voting events will follow the all stakeholders voting rules according to the VeChain Foundation Governance Charter. Details of each voting event will be announced one week in advance of the ballot open time.

4. What is the composition of the 2nd term Steering Committee?

As determined by the existing Steering Committee, the size of the 2nd term Steering Committee will remain as seven. Hence, according to 4.2.1 Size, Composition and Criteria of the Governance Charter in the 2nd term VeChain Foundation Steering Committee, stakeholder members that belong to the same entity can not occupy more than 3 seats and there should be at least one seat allocated to an independent member. In addition, the General Secretary of the Steering Committee will be elected by the 2nd term Steering Committee when it is formed.

The election process and the form of the Steering Committee should be interpreted in the context of all applicable laws. The on-boarding of the Steering Committee members will follow the legal requirement of Singapore where the VeChain Foundation is incorporated. The VeChain Foundation reserves the rights of final interpretation of the content herein-above and modification to the process as deemed appropriate.

Click the link below to download the Appendix：