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 an in-client decentralized 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. Bitcoin, Ethereum, zCash, Litecoin, US Dollar, and Euro tokens are supported on the Waves platform. 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. The project is associated with Waves Platform Ltd, a private limited company incorporated in England and Wales. The company retains some degree of centralized control, including the ability to de-list custom coins from the exchange. 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 the Miners Reward Token (MRT) and transaction fees, denominated in either WAVES or custom tokens, as validation rewards.
Decentralized Internal Exchange
The Waves platform has a decentralized exchange integrated with the lite client, where users can trade each combination of available tokens. Due to insufficient transaction volume, Waves completes the order matching process in a centralized manner as of April 2017. Settlement remains on-chain, and users retain full custodianship of their tokens. Order fees are paid in the native WAVES token.
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 programing 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 provide 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.
There are three tokens associated with the Waves network, WAVES, the primary token, MRT, a blockchain governance token, and WCT, a token for service access used by projects launching on the Waves network.
WAVES is the primary network token, with access and block creation 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. There is a fixed supply of 100 million WAVES, with 85 million distributed in the crowdsale and 15 million retained for the team, early investors, and bounties.
The Miners Reward Token (MRT) is an access and governance token accumulated to miners as a reward for block validation. It gives holders the right to vote on network proposals relevant to miners, such as block time, and incentivizes miners to operate nodes. Additionally, nodes can elect to accept MRT as transaction fees on the platform. A total of 10 million MRT will be released, with rewards decreasing every 50,000 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.