Waves is a decentralized financial trading platform written in Scala and built on its own blockchain with custom tokens being its main feature. Custom tokens, or ‘Custom Application Tokens’,(CATs for short), allow for a wide range of uses. They enable decentralized crowdfunding as well as transferring, trading and storing of fiat and digital currencies. In essence, a custom token can represent any value assigned to it while being cryptographically secured through the Waves blockchain. A decentralized, manipulation-free voting system will allow projects built on top of the platform to communicate and make decisions hand in hand with their community. Due to the distributed nature of Waves, a reputation system is on the road map whose function will be to assign a certain reputation score to an account based on its network activity and other parameters.
Waves Platform, as opposed to other projects in the crypto sphere, is aimed at both advanced and novice users. The involvement of mass audience is of utmost importance. This reflects in the ease-of-use of the wallet, the resemblance of the user interface to traditional online banking applications and the fast set-up process of the native wallet through a Lite Client, eradicating the need for a blockchain download. On the other hand, Waves Platform encourages advanced users, namely blockchain developers and businesses, to create their project on top of the Waves blockchain through its public API and cutting-edge technology.
The Waves Platform is running its own blockchain based on a Proof-of-Stake consensus algorithm. The blocktime is 1 minute and each block has a capacity of 100 transactions. The process of generating a new block is called forging or staking. A miner’s chance to generate a block is based on his stake vs. the total stake at work. Let’s make a quick example: Bob is forging with 100’000 WAVES and the total WAVES at work is 50’000’000. His chance to generate the next block is 100’000/50’000’000 = 0.2%.
Waves’ supply is fixed at 100 million WAVES. No more than that are ever going to be issued. The reward for forgers is solely coming from transaction fees included in the forged block. That’s why it’s imperative to get as many businesses, and as a result users, to use the platform. More network participants mean more transactions which gives higher rewards to forgers. This leads to an increased ROI (Return on Investment) and is therefore a stronger argument for market participants to invest.
How did it all start?
Waves Platform was founded by Sasha Ivanov at the beginning of 2016 after the Nxt developers presented a change of strategy which was seen as controversial by a part of the community, mostly digital asset investors. After assembling the core team for Waves, Sasha announced an ICO (Initial Coin Offering) for Waves which ran for roughly one month and a half.
On April, 12 2016, the crowdfunding for Waves Platform began. Within 6 hours the project raised USD 1m in Bitcoins and closed the first day of its ICO with 3’400 collected Bitcoins worth roughly USD 2m at the time. The second day was again busy with another 1’398 Bitcoins invested. After this initial rush, the crowdfunding slowed down considerably but funds still continued to trickle in. During the last days of the fundraising, momentum started to build up again which resulted in over half of the Bitcoins having been collected throughout the last week of the ICO. In the end, the total collected was 29’634 BTC – almost USD 16m at the time – making Waves the most successful crowdfunding of 2016 and the #6 largest crowdfunded project of all time. This result is just a few hundred Bitcoins shy of the biggest Bitcoin crowdfunding ever, namely Ethereum with 31’531 BTC.
A total of 5’790 participants invested on average a little over 5 BTC. The single largest account commited 866 BTC and received 2.87% of all WAVES. The Top 10 accounts invested 5’178 BTC and were distributed around 17% of all WAVES.
For more details, check out the ICO summary.
How does Waves differ itself from previous approaches?
It is no secret that the Waves team has taken some ideas from other crypto projects such as Nxt, BitShares or SuperNet, especially given that the original community is a break-off from Nxt and SuperNET. Nonetheless, each and every feature is being reviewed for improvements and coded from scratch in Scala. Find below a list of features found in other digital currencies and how Waves lifts them to the next level.
Custom Application Tokens (CAT)
CATs are the simplest form of a digital token which is cryptographically secured by the underlying blockchain. First found in Nxt, Waves is taking CATs to a new level by building the platform around that feature. The goal is that every user, regardless of his previous knowledge, is able to issue and manage his very own digital token. Installation, account creation and token issuance takes a user around 5 minutes and the transaction fee at .001 WAVES is very reasonable. Moreover, Waves wants to make its tokens as customizable as possible. A case in point is the option to make a CAT re-issuable, meaning that after initial creation the supply can be further increased.
Another great improvement is what we call Tokens Flexibility. It gives projects on top of Waves and users the opportunity to pay transaction fees not in the native WAVES token but any other token existing on the blockchain. This allows businesses to create a closed ecosystem in which they only have to deal with their very own token rather than taking a second one, namely WAVES, into account.
A decentralized exchange, also known as asset exchange or simply Dex, enables the trading of custom tokens. Waves is following a unique approach in the development of its Dex: Centralized order matching paired with decentralized settlement. This means that every time a buy and sell order meet, the matching is being processed immediately over a centralized server infrastructure. The settlement as in transferring the funds between buyer and seller, however, is being executed on the blockchain. This approach allows for a trading experience only known from centralized exchanges but with higher security due to the elimination of a single point of failure – the trading funds are in your personal wallet, in a decentralized environment, at any time. (waveswiki.org)
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