What is the Waves platform?
Waves is a blockchain platform you can use to create your own custom token. Whether you want to crowdfund a project, build out a loyalty rewards program, or create an in-app currency, the Waves platform may be worth looking into.
According to their website, you can create your own token in as little as one minute (but you may want to take some time and have a good plan on how you’re going to use it first.)
Waves also includes a decentralized exchange, DEX, in which you can trade your newly created coin in a trading pair with any other Waves token.
In this Waves platform guide, we’ll talk about:
How does the Waves platform work?
To put it simply, new tokens that you create and transfer using the Waves platform are done so as attachments on blockchain transactions. There’s an inherent problem with this strategy, though. Using the typical blockchain protocol, as seen in Bitcoin, the network client software needs to update with each new transaction type. This is more commonly known as a hard fork.
To prevent this, Waves implements new transaction types through plug-ins as an extension on top of the core software. That way, clients missing the plug-in can still relay the custom transaction through the network.
There are only a handful of transaction types included in the core software:
- Custom Application Tokens (CATs)
- Decentralized exchange (DEX)
- Anonymity features
Custom Application Tokens (CATs)
The primary focus of the Waves platform is in the creation and transfer of custom tokens. You can create a token directly through the lite client which is available on the web as well as both Android and iOS.
The tokens that you create can be bought, sold, traded, and transacted all without a middleman. Because you can customize the coin, they can represent whatever you want.
It costs 1 WAVE to create a token – about $13.40 at the time of this writing.
So far, over 7,000 custom tokens have been issued using the Waves platform with a combined market capitalization of over $1 billion.
Decentralized exchange (DEX)
Decentralized exchanges reduce many of the risks associated with using a typical, centralized exchange.
Because your funds are stored directly in your wallet, there’s almost no chance of the DEX being hacked. Additionally, decentralization means that there’s no administrator to freeze your funds or limit your trades and withdrawals. You have complete control of your account.
The DEX uses an automated matcher to pair buy/sell orders and exchange the tokens when orders are fulfilled.
There are multiple trading pairs available on the DEX including Bitcoin with USD, Litecoin with Bitcoin, and Ethereum with Bitcoin. These pairings represent less than 3% of the trading volume, though.
The most popular trades on the DEX are between Waves and Bitcoin.
You can check out CoinMarketCap for a complete list of the trading pairs available.
Although you need to provide KYC/AML information to use the fiat gateways, all crypto-to-crypto orders on the DEX are completely anonymous.
Waves token & architecture
Waves differs slightly from the traditional architectural structure that other blockchain companies are using. To prevent scaling issues, the platform uses a two-tier architecture with both lightweight and full nodes maintaing the network. This is different than the strictly full node approach that Bitcoin purists favor.
Waves lightweight nodes never download the blockchain. Instead, they depend on the full nodes for transaction confirmations and the interactions on the network.
The strategy is taken from the SuperNET lite client which has been successfully validated by the NXT project.
To facilitate the trust between lightweight and full nodes, Waves uses the Scorex platform. Instead of downloading the complete history of transactions, lightweight nodes use the current network state. They then use that state to establish simplified payment verification processes.
Leased Proof-of-Stake (LPoS)
There are 100,000,000 Waves tokens, WAVES, in circulation.
The platform uses a variation of the traditional Proof-of-Stake consensus algorithm to maintain network integrity. In a Leased Proof-of-Stake system, you can stake your tokens by “leasing” them to the full nodes that are running the network.
You need 10,000 WAVES to run a full staking node. If you don’t have that many, you can still participate in staking by leasing your WAVES to a public mining pool.
Some Waves history
Multiple members of the Waves team previously worked on the NXT project together. A poor initial coin distribution, rotating development teams, and controversial development decisions were all factors in them leaving to start their own project – Waves.
Instead of forking from NXT, the team decided to start completely from scratch. A major difference between the two platforms is Waves’s emphasis on inherent fiat integration.
The company has recently partnered with Deloitte to provide clients with ICO services and is also working with the Russian National Settlement Depository (Moscow Stock Exchange) to potentially develop a blockchain platform to distribute digital assets.
There’s no shortage of competition in the smart contract space. Ethereum is currently the big name when it comes to ICOs but there’s enough room for other projects as well. NEO, NXT, Lisk, and Stratis are also competing for smart contract clients.
Waves appears to be carving a niche by focusing on mass adoption through simplicity. The tokens you can create with Waves are missing some of the functionality seen on other platforms, but they’re ridiculously easy to make.
Waves completed their ICO in June 2016 raising over $16 million. Almost immediately after the ICO, the price of WAVES plummeted 80% and stabilized around $0.20 (0.0003 BTC).
The price remained relatively flat before rising up in July this year. This run-up was most likely caused by the release of their roadmap as well as a partnership announcement with ICO Hub for a pre-ICO challenge.
Since then, the price has been slowly falling before it jumped to hit a new all-time high (in USD) this December. Among other factors, this bull-run was most likely caused by the team’s claim that Waves will soon be the fastest blockchain in the world.
With Bitcoin’s scaling issues, speed is increasingly becoming a greater and greater factor when evaluating the value of a cryptocurrency.
Where to buy WAVES
You have multiple options available to buy WAVES:
- Lite client
Numerous exchanges like Binance and Bittrex have WAVES available for trading. To exchange for WAVES on these platforms, you first need to purchase Bitcoin or Ethereum. Once purchased, transfer your funds to one of the previously mentioned exchanges and trade them for WAVES.
You can also use the DEX to exchange for WAVES. The token is available to trade with BTC, USD, and EUR although trades with Bitcoin have significantly more volume than the other two. Usually, the higher the volume, the easier it is to trade.
You can purchase WAVES using a credit card through the lite wallet client too.
If you’re only interested in owning a few WAVES and are tight on a budget, faucets could work well for you. Through a faucet like Wavesdrop, you can earn up to 0.0001 WAVES every hour. It’s not much, but hey! It’s free.
All you need to do is enter your public WAVES address and confirm that you’re not a robot.
Where to store WAVES
The best place to store your WAVES is in the lite wallet client provided by the company. Keeping your funds on an exchange exposes them to hackers and leaves them under the control of a third-party.
The lite wallet is available online and as a Chrome extension. You can also get it on your mobile device through the Apple App and Google Play stores.
Make sure to lease out your tokens when storing them so you can support the network and get those nice staking rewards.
Waves provides an easy way to create your own token and take advantage of simple blockchain functionality. The platform is good for people looking to run a crowdfund or create a simple loyalty coin for their business.
The value of Waves is within its simplicity. Anyone can create a customized token with a few clicks and little knowledge of the underlying technology.
Beyond straightforward token creation, Waves also operates a decentralized exchange.
The team has formed meaningful partnerships with the Russian government and Deloitte accounting firm. Although the smart contract space is massive, the team faces considerable competition from several other blockchain projects.
If the team follows through on their guarantee to make Waves the fastest blockchain in the world, it’s feasible to see the platform gain significantly more popularity.