Authority Masternode (VeChain)

An Authority Masternode is a validator node on the VeChainThor blockchain that is permitted to produce and validate blocks under the network's proof-of-authority consensus. Unlike miners or stakers on open networks, Authority Masternode operators are a limited group whose real-world identities are known and who have been approved through a vetting process. The original design allowed up to 101 such nodes.

VeChain is a public blockchain focused on supply chain tracking, enterprise data and sustainability applications, with two tokens: VET, the main value token, and VTHO, used to pay transaction fees. Authority Masternodes sit at the top of its node system, distinct from economic nodes whose holders earned rewards without producing blocks. The model is a form of masternode design that trades openness for speed and accountability.

On many blockchains, anyone with enough computing power or coins can help write new pages of the shared record book. VeChain originally chose a different approach: a fixed panel of known, vetted record-keepers takes turns writing pages. Each one has signed up with its real identity, so if it misbehaves, everyone knows who to blame.

This makes the network fast and predictable, which suits businesses. The trade-off is that the panel is small and chosen, rather than open to anyone, so users must trust the selection process as well as the code.

• Block production. Authority Masternodes take turns proposing blocks in an order determined by the protocol, with a new block roughly every ten seconds.
• Identity and vetting. Operators submit to know your customer checks and approval by the VeChain Foundation's governance process, and must meet hardware and uptime standards.
• Token holding. Operators have been required to hold a large amount of VET, publicly reported as 25 million VET, in the node's associated account.
• Accountability. Because identities are known, a node that acts maliciously or goes offline repeatedly can be removed.
• Finality. Upgrades added a finality mechanism inspired by Byzantine fault tolerance so blocks become irreversible more quickly.

Transactions on VeChainThor pay fees in VTHO. Under the original model, most of each transaction fee was burned and the remaining portion went to the Authority Masternode that produced the block, commonly described as a 70% burn and 30% reward. Holders of VET also generate VTHO over time, which links the economics of the two tokens. This design is distinct from systems where rewards come mainly from newly issued coins, and it ties node income to network usage.

Authority Masternodes differ from the validators of open networks in how they earn the right to produce blocks. Under proof of work, anyone with mining hardware can compete, and security comes from the cost of electricity and machines. Under proof of stake, anyone who locks enough tokens can validate, and misbehaviour is punished by losing part of the stake. Under VeChain's proof of authority, the right comes mainly from being approved and identified, with reputation and legal accountability acting as the main deterrent. Alongside the masternodes, VeChain historically ran tiers of economic nodes for large VET holders, which earned extra rewards without producing blocks; these arrangements were reworked as part of the network's 2025 staking changes. Fees are paid in VTHO rather than VET, so the network's gas fee costs stay separate from the main token's price, and the share of fees that is burned reduces VTHO supply over time, a form of token burning.

The VeChain Foundation, its steering committee and holders of certain node types have played roles in approving operators and voting on proposals. In 2025 VeChain began a series of upgrades, including stages it called Galactica and Hayabusa, intended to move the network towards a delegated proof-of-stake model and widen participation in block production and rewards. Readers should check VeChain's official documentation for the current status of these changes, since node requirements and reward rules may have been revised.

Critics argue that a small set of approved validators makes the network more centralised than open proof-of-work or proof-of-stake chains. A low number of independent block producers can mean a low Nakamoto coefficient, and the foundation's role in vetting operators concentrates influence. Identified validators could also be pressured by governments or companies to censor transactions. Supporters respond that known operators, legal accountability and fast finality suit enterprise users who need predictable performance, and that recent upgrades aim to increase decentralization. The debate reflects a wider trade-off between permissioned efficiency and open participation in blockchain design.

• VeChain