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Introduction to Waves Protocol and WAVES Token

UTC by Oluwapelumi Adejumo · 6 min read
Introduction to Waves Protocol and WAVES Token
Photo: Depositphotos

The guide provides all you need to know about Waves protocol – a blockchain platform that combines the functions of a cryptocurrency, a token launch, and a decentralized exchange (DEX).

Upon the introduction of blockchain technology, developers found it difficult to strike a balance between its features such as accessibility, usability, and feature-set. However, the Waves (WAVES) protocol has been able to address this concern to a significant extent. Waves is built with a user-friendly blockchain solution that is able to power the future of Web 3.

What Is Waves?

Waves is a blockchain platform that combines the functions of a cryptocurrency, a token launch, and a decentralized exchange (DEX). These cryptocurrency tokens are commonly referred to as smart contracts. There is an option on the Waves blockchain that gives users the freedom to buy, sell, and trade other cryptocurrencies.

Since its launch, Waves has morphed into one of the Top 100 most successful cryptocurrencies around. This growth has resulted in a market capitalization of almost 700 million dollars, as of July 2021.

History of Waves

Waves made its entry into the market in 2016. The blockchain platform was a success from the get-go and the firm’s Initial Coin Offering (ICO). It was able to secure over $16 million at its launch. The experience of the team working on the platform played a huge role in how successful it was after its launching.

Waves network underwent a major upgrade in September 2018. This upgrade led to the integration of several features such as support for multi-sig addresses, atomic swaps, token freezing, voting, and oracles. Oracles serve as off-chain sensors which communicate with the blockchain.

Precisely a month later, analysts on Waves clocked 6.1 million transactions on the platform in a single day. Thus setting the record for the most processed transactions of any blockchain platform in a day.

The Waves Blockchain

There are several key components in the Waves blockchain. They include nodes, PoS and LPoS, Waves NG, smart contracts.

  • Nodes

The two-tier architecture that maintains the Waves network is divided into full nodes and lightweight nodes. The full nodes are the miners that validate transactions as well as add new blocks to the blockchain. Meanwhile, the lightweight nodes speed up transactions and communication within the network. What makes lightweight nodes faster is their inability to download the blockchain.

  • The Waves PoS and LPoS

LPoS is an acronym for Leased Proof of Stake. It is an enhanced version of the PoS consensus algorithm through which Waves aims to secure the Waves network via the distributed consensus. Users are able to lease their tokens to the full node at the rate of 0.002 WAVES per leasing. For node owners, leased tokens can help them generate blocks and access the mining reward. Also, the token holders stand to benefit from leasing as they are afforded the opportunity to put their tokens up for lease to the Waves nodes and earn a commission.

  • Waves NG

Waves NG is a new protocol introduced by the Waves platform that allows its blockchain to handle numerous transactions in the shortest time possible. The feature mirrors the Bitcoin NG and its principles jettison the principle of discovering blocks at similar intervals. It also gives users the freedom to process their transactions as soon as the requests are submitted to the network.

  • Smart Contracts

The smart contract feature launched in September 2018. It aims to rival the likes of Lisk (LSK), EOS (EOS), Ethereum (ETH), and NEO (NEO). Waves smart contract promises to deliver atomic swaps, token freezing, multi-signature addresses, voting, and oracles. 

Key Features of Waves Protocol

There are several features of Waves that stand it out from other blockchain platforms.

Firstly, it employs Fiat Gateways. This enables users to trade any token issued on the Waves stage for physical cash, which can be kept in a bank. An example is USD/EUR/CNY.

Secondly, its KYC/AML feature stores and pulls back fiat cash. KYC is however not important for digital currency exchanges. 

Thirdly, transaction fees on Waves can be as low as 0.001 WAVES for a regular transaction or about 0.005 for transactions that invoke the script.

Further, the WavesDEX enables users to exchange their BTC/ETH as well as other digital currencies in return for WAVES. WavesDEX is decentralized based on the Waves blockchain.

Finally, anyone can launch smart contracts on Waves as no programming experience is necessary. This is because they are not as intricate as Ethereum but secure and capable. 

Use Cases of Waves Protocol

Some of the uses cases of Waves protocol include a transparent venture capital organization Tokenomica, a political engagement initiative Upcoin, a green manufacturing business technology ZrCoin, a marketing drive for a mobile gaming platform MobileGo. Besides, a safe telecommunications infrastructure company EncryptoTel and a blockchain loyalty scheme called Incent also use Waves.

Advantages of Waves

In its role as a pioneering force in the market, Waves has continued to create awareness for mass adoption via simplicity. There are therefore a host of benefits that lie in the blockchain platform.

Waves is very convenient to use. It provides users an easier way to create their own token owing to its simple blockchain technology. Ethereum demands that developers possess an understanding of programming languages such as Solidarity in order to be able to execute smart contracts. However, Waves tokens are easy to program and are ideal for firms with basic functions like those into utility tokens, and loyalty programs. 

Users on Waves have the liberty to stake their cryptocurrencies and earn a reward in return. The purpose of stakers on the Waves blockchain network is to maintain stability. In order to insure against the potential financial loss that could occur if users run a malicious node, PoS network would demand users to make huge deposits to participate as a node.

As a trader on Waves, you have access to a decentralized exchange (DEX) that allows you to trade any Waves-based token with any other Waves-based token in a matter of seconds. The platform also provides projects with immediate access to liquidity making it perfect for token launch strategies.

WAVES Token

Waves token is the major crypto on the blockchain. The token can serve as a payment option, and it can also be used to create new tokens or stake for rewards. That makes the token very versatile. Waves has a total of 100,000,000 tokens in circulation. The platform has been able to raise 16.4 million dollars during its ICO that took place between April to May 2016. Its tokens are available for trade on several exchanges including Binance, Bittrex, etc.

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FAQ

What is Waves?

Waves is a blockchain platform that combines the functions of a cryptocurrency, a token launch, and a decentralized exchange (DEX).

What issues does Waves address?

The first problem that the creation of Waves aims to address is confusion. Waves gives users without programming knowledge the chance to be able to launch their own token. The simplification of the process of launching tokens ensures that Waves can guarantee value transfer for an array of real-life assets.

Who founded Waves?

Waves was founded by Alexander Ivanov.

How does Waves work?

Waves depends on a two-tier architecture that has both lightweight and full nodes maintaining the network. In order to increase efficiency, developers decided to integrate the NXT SuperNET lite client.

What are Waves PoS and LPoS?

Waves PoS is a consensus algorithm that aims to secure its network. LPoS is the enhanced version of Waves PoS, which is also useful in its network security.

What is Waves NG?

Waves NG is a new protocol introduced by the Waves platform that is built to allow its blockchain to handle numerous transactions in the shortest time possible.

What is Waves token?

Waves token is the major cryptocurrency on the Waves blockchain that can be used as a medium of payment, create new tokens or stake for rewards.

Where to spend Waves?

Waves operates like any other cryptocurrency with certain unique features. Waves can be used to create tokens, which can be used to pay for goods and services within a specific project. It can also be used for crowdfunding projects.

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