Waves is a blockchain platform that allows users to create and transact custom tokens using the native WAVES token. These include both fiat and crypto tokens, which can be transferred on the native blockchain and traded on the non-custodial Waves exchange. Custom tokens are implemented as plugins to the base software, which is intended to improve upon systems such as NXT, where each addition required a mandatory hard fork to update client software for each new token. Waves emphasizes usability, with lite client browser and mobile wallet applications available. The ICO raised 30,094 BTC ($16m) in April and May 2016, and the network launched in November 2016.
The project was founded in 2016 by Sasha Ivanov, a Russian physicist, founder of the instant cryptocurrency exchange Coinomat, and NXT community member. Development of the project is open-source, and client code is available on Github.
Leased Proof of Stake (LPoS)
Waves uses a modification of traditional PoS, Leased PoS, where token holders lease their balances to full nodes. Block creation is completed by full nodes, and rewards are given in proportion to the number of tokens leased to the validating node. Token holders retain full custody during this process. Full nodes must locally own or be leased a total of 10,000 WAVES. Due to this balance requirement, transaction validation has been somewhat centralized at times. Full nodes receive block rewards and transaction fees, denominated in either WAVES or custom tokens, as validation rewards.
The blockchain consensus process is Waves-NG, based on the proposed Bitcoin-NG protocol. In Waves-NG, a new ‘block leader’ is chosen for each block interval in advance, and validates transactions prospectively, as they are posted to the network. This is in contrast to protocols in which transactions are validated retrospectively, such as Bitcoin. Waves-NG improves scalability on the network.
Waves enables users without programming experience to issue tokens, with token issuance supported at the protocol’s core level and tokens not being smart contracts. One of the key features of the Waves platform is easy token creation. ‘Smart Asset’ functionality is intended to provide an additional layer of operations to Waves tokens by allowing users to apply scripts to tokens. Scripting uses the RIDE programing language, a language designed for simplicity in execution and greater security. Smart asset applications include asset freezing, whitelisting, taxation, and multi-sig functionality, with a fixed fee of 0.004 waves required for script execution. Smart asset functionality began testing in October 2018 and was released to mainnet late 2018.
Since its inception, there have been several tokens in existence within the Waves ecosystem. Previously miners were rewarded with the Miners Reward Token (MRT), allowing them to participate in mining governance decisions in return for validating transactions, however, the token was subsequently phased out after the transition to the new community-driven monetary policy with MCT holders compensated with WAVES tokens in late 2019. As of 2020, there are three active tokens associated with the Waves network, WAVES, the primary token, WCT, a governance token for ICOs launched on Waves and WRT, a rewards token.
WAVES is the primary network token, with access, block creation, and monetary policy governance rights. It can be used to create new custom coins and to pay transaction fees for existing coins on the network. WAVES also determines block creation in the LPoS model. WAVES' supply was initially fixed at 100 million tokens, with 85 million distributed in the crowdsale and 15 million retained for the team, early investors, and bounties. However, in September 2019, the project transitioned to a community-governed monetary policy, allowing nodes to adjust block rewards, although changes are limited to a maximum of 0.5 WAVES per-adjustment at minimum intervals of 100,000 blocks.
The Waves Community Token (WCT) is a governance token for crowdfunding campaigns (ICOs) launched on the Waves platform. Projects can exchange a portion of their native tokens with WCT holders for a variety of services, such as concept and token economics evaluation. Beginning in January 2017, WCT was released monthly to WAVES holders proportional to their local wallet balance. This distribution of 10 million WCT was completed in September 2017.
The Waves Reward Token (WRT) is a reward token, with 50% issued to community members who have made significant contributions to the Waves ecosystem and the remaining 50% airdropped to existing holders of WCT. The token makes use of Waves' smart asset scripting functionality that ensures WRT can only be sold by Waves' ambassadors.