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What is Waves - Everything you need to know about Waves : THUMBNAIL

What is Waves? Everything You Need To Know About Waves

What is Waves? 

Being a web 3.0 enthusiast, you’re sure to have dreamt of creating your own DApp and launching your own crypto tokens. However, this usually requires that you have extensive knowledge of programming smart contracts, with expertise in languages like Solidity, Javascript, Rust, etc. With the Waves blockchain, on the other hand, the dream of launching your own cryptocurrency can very well become a reality.
Waves allow users to create and trade crypto tokens without the necessity for elaborate programming of smart contracts. You can launch and govern your very own Waves cryptocurrency just like you would create your own web application. 

Who Created Waves? 

Sasha Ivanov came up with the concept of the Waves Blockchain on April 2016. He established a for-profit company – Waves Platform AF, in Moscow. The primary function of this organization was to raise the necessary funds required to create a new blockchain network. After a successful ICO worth $22 million, the Waves blockchain was officially launched in the third quarter of the year 2016. 

How Does Waves Work? 

There are two different types of nodes that are crucial to the functioning of the Waves blockchain.

  1. Full Nodes
  2. Lightweight nodes 

Waves functions on a consensus algorithm that is very similar to the Proof of Stake method – called the Leased Proof of Stake consensus mechanism

The Waves LPoS Blockchain

The Waves LPoS blockchain
Source: Golden| By using the LPoS mechanism, nodes that lease the tokens earn a percentage of the payout. 

Unlike the traditional Proof of Stake mechanism, where any node that locks up tokens is eligible to add blocks to the blockchains, in Waves blockchain, lightweight nodes have the option to lease their coins to full nodes. By using the LPoS mechanism, nodes that lease the tokens earn a percentage of the payout. Hence, all nodes participate in the LPoS consensus – both directly and indirectly. 

Waves-NG

Waves-NG
Source: Waves Doc | Comparison of Waves’ TPS with other blockchains 

Waves-NG is the protocol that establishes the node that can produce the next block. This is a variation of the initial idea that was proposed for Bitcoin.
This protocol breaks up the crypto Waves into two kinds of blocks, namely the key blocks and micro blocks. Key blocks are usually created by a randomly selected PoS miner. From this Key block, a public key is used by the other nodes to create micro blocks containing all the other details, including the transactions. 

Smart Assets

One of the key features of the Waves blockchain is its ability to create smart digital assets. These digital assets are tokens that are enclosed in a script written in the Waves blockchain’s native language, Ride.
These scripts give functionalities to the tokens and cost around 0.004 Waves cryptocurrency per script to execute. 

Nodes and Staking 

The Waves blockchain is reliant on a two-tier architecture, with the lightweight and full nodes being utilized to maintain the network. 

Full Nodes are miners that add new blocks to the Waves blockchain and validate transactions. These nodes stake their crypto WAVES to earn rewards. 

Lightweight nodes are used to hasten the communications and transactions within the network, as they don’t download the entire blockchain. They rely on the full nodes for confirming transactions and other interactions. 

What is Waves Cryptocurrency? 

Following are some of the key features that differentiate the Waves cryptocurrency from the other blockchain platforms. 

Token Creation 

Using the native language, RIDE, users can easily create their own DApps, create their own tokens, called Custom Application Tokens, and give it unique functionalities without having to go through the hassle of creating complex smart contracts. 

These tokens can be bought, sold, or exchanged based on the rules that are programmed into them using the RIDE language. Combined with the unique LPoS consensus mechanism, these tokens offer higher levels of autonomy, anonymity, and a significantly lower transaction fee.

Decentralized Exchange (DEX) 

Another main feature that makes the Waves platform popular is its decentralized exchange – Waves.Exchange.  The exchange facilitates users to trade the different tokens created on the blockchains with other tokens, the WAVES cryptocurrency and fiat currencies.
The debate for and against centralized exchanges and decentralized exchanges is not going to come to an end anytime soon. If you’re someone who prefers anonymity and the lack of centralized supervision, you may favor this DEX. However, please do make sure to check with your local laws if transacting with a DEX is even allowed. 

Waves Wallet

The waves blockchain platform also offers its indigenous wallet – Waves Wallet –  to store the WAVES crypto or any of the Custom Application Tokens created within the blockchain. The lite wallet is online-only, which is guaranteed to be safe by the Waves network. Leaving the tokens on the exchange account increases your vulnerability levels, with chances that your tokens might be hacked or controlled by authorities. However keep in mind, the lite wallet is online as well and anything online is inherently prone to hacking and other cyber crimes despite the ‘guarantees’ by Waves network.

The WAVES Token 

The WAVES token is seen as a competing token with Ethereum, standing apart with its unique take in the DApps world. Obviously, this token forms a crucial part of the successful functioning of the blockchain and can easily be purchased through different exchanges of your choice. The tokenomics of the WAVES token can be found here.  

How does the WAVES Platform Work? 

1. Decentralized Exchange

The Waves platform, as explained earlier, has a decentralized exchange, allowing the different custom application tokens created within the network to be traded with each other. Apart from these tokens, the exchange also allows you to transact between the various popular currency pairs, like Bitcoin/USD, Bitcoin/Litecoin, etc., with the WAVES/Bitcoin being the most popular pair on the exchange.

2. Custom Application Tokens (CATs) 

Using the lite client (downloadable on iOS and Android), users can design and create their own tokens and transfer them across the system. You can get the coin you’ve customized to do whatever you want. To create tokens, you’ll need to use WAVES. Typically, it costs around 1 WAVES crypto for you to create your own token.
Over 7000 tokens are introduced within the WAVES network, with most of each addition seeing an increase in the value of the crypto WAVES. Note though, this is based on its performance in the bull market from late 2021 to early 2022 and does not take into account of its performance in the subsequent bear market that has been a constant through 2022.

3. Complete Anonymity

One of the main attractions that are on offer by the WAVES platform is the level of anonymity you get while using it. Depending on laws and rules at a given time, you might have to part with some additional information while transacting fiat currencies, but other than that, users can enjoy 100% anonymity. It is said that no one can apparently Dox you purely based on your trades at the exchange which is by the way a bare minimum people expect with decentralized platforms.

Advantages of Waves

  1. Ability to create customizable tokens with little programming. 
  2. All-in-one platform with access to its own wallet system, DEX, and even token crafting.
  3. Being a DEX, the Waves platform places literally 0 limits on trading. 
  4. Allows you to transact with fiat currencies as well. 
  5. The DEX pairing on the platforms is touted to be incredibly advanced, with a wide variety of options available. 

Disadvantages of Waves

  1. Despite offering an easy way to create DApps, Ethereum is still the more favored platform especially by Web3 followers. 
  2. Crowdfunding, as a market, is extremely saturated, with plenty of options available to users.
  3. There is a non-zero chance for delays in commitments by the WAVES investors, as it is still an up-and-coming platform.

Conclusion

Waves is a fresh take on the Web 3.0 vision of decentralized Earth. This network can very well be the key to popular adoption, as it enables anyone to create their own DApp, just like everyone can create their own web application right now. The last 6 years since its inception has been exceptionally strong, with the Waves dev team planning a lot more to come in the future.

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