With the hype of the Neon Exchange’s lottery signup today, it’s easy to overlook the decentralized exchanges (DEXs) that already completed their ICOs in 2017.
Kyber launched its decentralized exchange on February 11th, 2018. Waves beat them to the punch launching its Bitcoin gateway (now deprecated in favor of WAVES) in March 2017.
If you have been in the crypto space over the last 12 months you recalled the “ICO Summer” in 2017. Now it’s 2018, and it is an MVP year. We’re not talking about the Most Valuable Player. We’re talking a Minimum Viable Product. The companies that raised money last year raised expectations for the blockchain and cryptocurrency industry. With close to $6 Billion USD raised in ICOs you have to imagine the expected value investors hope the industry will bring is at least 10x. That’s $60 Billion USD in expected value.
In my last post I mentioned 3 of every 5 ICOs have failed/exited or are well on their way. That’s a heavy burden for the remaining 2017 ICO Summer cohort.
Let’s review. What is Waves?
Waves is a decentralized platform to leverage blockchain and crypto assets for a number of use cases. There are several well written articles covering the features of Waves but let’s go over it quickly a a refresher.
Waves is a blockchain
True. Waves created its own blockchain. In fact, it boasts to be the fastest decentralized exchange with one minute block times and a throughput of 6K transactions per second (TPS). That’s faster than Bitcoin and Ethereum combined. Waves platform uses a two-tier architecture with both lightweight and full nodes maintaing the network. Bitcoin on the other hand uses a full node approach. This enables faster throughput. Waves is continuing to improve its Wave-NG protocol so expect its throughput to increase from hereon out. It will have to in order to attract enterprise level interest as well as stay ahead of its peer protocols.
Waves is a DEX
True. The Waves exchange is completely decentralized. It’s accessible via a number of applications:
- Waves Lite Client
- Waves Mobile Client (Android and iOS)
- Waves Desktop Client
- Waves Full Node (GitHub)
In addition to its high accessibility, Waves has low fees. Each trade will cost you a flat fee 0.001 Wave. That’s far lower than trading fees on centralized exchanges, even versus native tokens with discounts offered such as Binance Coin (BNB).
Waves is a TGE (Token Generation Event) as-a-Service provider (TAAS)
Anyone can create their token. Perhaps you want to create a voting platform where your constituents use your token. Or you want raise money via an ICO (initial coin offering). Without coding experience you can create your own token on the Waves platform.
“One of the core Waves missions is to enable any business with development prospects, regardless of its size and geographical location, to run the ICO and raise funds for growth and development. We are deeply convinced that in the new digital economy, the ICO can compete with other tools for raising investment both in the high-tech industry and in the real sector and industry,”
~ Alexander Ivanov, CEO and founder of Waves.
To create your own token check the Create Assets section of this document. The cost of token creation is a mere 1 Wave (at the time of this writing at just under $6 USD).
Waves has liquidity and fiat gateways
Fiat pairings within Waves are represented with a lower case w in front of its abbreviation. For example, the Euro on Waves is represented as wEUR and weighted at 1:1. Fiat pairings on cryptocurrency exchanges have two basic approaches. The least supported mechanism today is to have a fiat gateway where a payments processor is willing to work with an exchange representing each fiat currency with a digital counterpart. The second approach is to use a stablecoin which is pegged to a certain value. Waves uses the first approach.
Once you are on the Waves blockchain you can do all kinds of operations there, including fiat transfer and trading your fiat against available blockchain tokens.
In addition to liquidity, Waves invented the Liquid token. If you invented a token and wanted to create liquidity so it can start trading at DEX, you can avoid having to painfully code interacting with an exchange’s API to have it listed. Instead, you can work with a market maker to integrate your token into the DEX. The Liquid token acts as the currency to pay these market makers.
When you and the market maker agree on terms the maker will then:
- Burn 10% of the received token supply
- Convert a portion into BTC, Waves, and other tokens you want paired against your token
- Start providing liquidity for your token against the currencies in step #2
The more trading pairs, the more options future buyers and sellers have to trade your token. Now this is a far better source of creating liquidity than working with Gen 1 DEXs such as EtherDelta or IDEX.
Waves has vision
Whenever I read any writings or Tweets from the team at Waves it reminds me they’re looking to federate real work impact by empowering makers to realize their visions via decentralization. That’s a far reaching vision to get behind.
A powerful vision and strategy is one thing, but a realistic roadmap and commitment to execution is even more enlightening. Slated for the remainder of 2018, Waves plans to shift from non-Turing complete smart contracts to Turing complete, enable atomic swaps, and add messaging into their platform.
So what will drive Waves’ value?
Waves’ platform and token (WAVES) will grow if any or all of the following occur:
- ICOs choose to launch on Waves instead of Ethereum, Neo, Qtum, Icon, etc. Without needing to code its own smart contracts there is plenty of incentives for crypto firms to do so. One caveat, another platform we love (Neblios) will also enable this feature.
- The Liquid token becomes more scarce and increases in price. If anyone can launch a token you can bet a higher number of garbage coins will enter the DEX. Hopefully the market makers today are charging a hefty fee to weed these would be scammers and amateurs out. Much like Binance or Poloniex, charging a market clearing sum will self select good projects.
- Continue focusing on simplicity. Future companies and teams thinking of an ICO may not want to learn Solidity to code an ERC20 token. They may not even want to code at all on platforms that work with well established languages (i.e. NEP5 smart contracts use common programming languages such as Python, C#, .NET, Java).
- Increase its throughput (TPS) to compete with its centralized and hybrid counterparts.
I’m not here to tell you to buy Waves or not but I am here to tell you its a project with real product release, real trading volume, and real vision.