All you need to know about Waves
The Waves Platform
What is the Waves Platform exactly?
That’s a tough nut to crack because the Waves Platform is so many different things all at the same time. Before I dive into all of the amazing features I want to make a distinction. The Waves Platform is the Waves Blockchain and the Waves Client built on top of that blockchain while everything else is part of the overall Waves Ecosystem. Now that we have some definitions out of the way let’s get rolling by looking at the base layer the Waves Blockchain.
The Waves Blockchain is the basis for the Waves Client and everything running on Waves. The blockchain itself was created with heavy influence from the idea of “colored coins” and the custom tokens of the Nxt blockchain. Waves is the evolution of the colored coin and Nxt vision but uses a new approach for flexibility of the blockchain.
Instead of appending token transactions to regular blockchain transactions, Waves uses “plug-ins” that introduce new transaction types. These plug-ins are built on top of the core software meaning in order to make use of those transactions the user would need to install that plug-in. Don’t want that transaction type? Don’t install the plug-in and the additional transaction types occurring will have no effect on your experience, even though the nodes you’re using for your transactions are relaying the plug-in transactions.
This system and the ability to create custom tokens allows the Waves blockchain to transact one custom token against another custom token. In essence, tokenization and trading of any asset is, therefore, possible on the blockchain. The example given in the whitepaper is the trading of tokenized national currencies, so with the custom token tied to the USD, I could trade that for the custom token tied to the Japanese Yen on the Waves blockchain. The possibilities really are quite limitless with that functionality and to pair with that the Waves blockchain has a top of the line consensus protocol to match.
Waves-NG is the next-generation consensus algorithm that is currently employed by the Waves blockchain. This protocol is based on the Bitcoin-NG protocol that was developed at Cornell University. The protocol was designed with the idea of fixing scalability issues that have been a topic of debate in the Bitcoin community for many years. Waves took that protocol and adapted it to their Proof-of-Stake system.
To understand the improvements to this system there must first be a discussion about how a typical model functions. With Bitcoin, it’s designed that blocks are discovered at regular intervals and transactions are processed when a miner validates a block. Of course, only so many transactions can get into each block then and those blocks are only discovered so quickly. In short, there is a cap on the transactions per second of a classic blockchain. Bitcoin, for example, has a theoretical maximum of 3 transactions per second.
Waves take a slightly modified approach to the NG protocol. Waves have what is known as liquid blocks for the blockchain and in Waves-NG liquid blocks are made up of key blocks and micro blocks (the staple of the NG protocol). In this system, a miner node will earn the right via PoS to create a key block. That key block does not contain any transactions on the network but does contain the coinbase transaction and gives the node the right to create micro blocks. Micro blocks are made up of transactions seen by the mining node with the key block. The node adds transactions to these micro blocks without any Proof-of-Stake functionality occurring and then broadcasts those micro blocks to the network signing and therefore validating them with its private key.
This process occurs until a new mining node is chosen by the use of PoS to generate a new key block. Once a new key block occurs the previous key block bundles itself with all the micro blocks it generated forming a new and complete liquid block that’s added to the blockchain.
Given this approach, the Waves-NG protocol can reach a maximum of 100 transactions per second which dwarfs that of Bitcoin and Ethereum in terms of speed. Key blocks can be found quickly due to their small size of only the coinbase transaction and the creation and sending of micro blocks are only limited by how fast the network can broadcast them. As explained, the NG system still maintains the decentralized nature of the system and the Proof-of-Stake algorithm at the heart of the system. Moving forward let’s examine Waves Proof-of-Stake mechanism.
PoS and Leasing
Leased proof-of-stake (LPoS) allows Waves holders to profit by using their balances to secure the network — whilst retaining full control of their funds.
The way LpoS works is in multiple ways efficient and user-friendly at the same time.
With a few simple clicks, you can lease your waves funds through the waves wallet to a delegate node. Most nodes give away about 70–90% of their funds to their voters, means that you have the passive income of a master node without any technical difficulties or the need to keep your wallet running.
What I appreciate most about the Waves project is its focus on user-friendliness, we cannot achieve mainstream adoption with complicated ubuntu commands and other technical stuff.
The way Waves work is the difficult stuff is automated in the back and you only need to select certain things through a neat and clean interface.
This is how mass user adopted blockchain will and has to work!
Another positive effect through the leasing is keeping a decentral nature, the only other blockchain project that comes close to Waves in terms of power and speed is NEO, while I am a huge fan of the project, they are fighting with their centralized approach.
It is not so easy to decentralize a blockchain, in this area waves is sure among the leading projects.
Voting for multiple smaller nodes will be extra rewarded through advanced MRT token distribution. Means if you vote for smaller Nodes you will get some extra rewards. This will longterm lead to a wide and strong Node ecosystem.
The Client, currently in web and desktop/mobile version is like the cockpit of the whole waves operation. In it, you can send and receive your tokens, create new tokens, lease ur funds and of course trade on the dex a decentral marketplace with all Waves based tokens.
The waves team spent huge amounts of time, feedback gathering and funds on shaping and improving the dex.
They had an issue with spamming airdrops with scam sites in their name, while this is annoying, this, of course, is a sideproduct of the simple and cheap function to create and send your tokens.
Waves team, of course, reacted brilliantly by introducing a spam filter, a burn tool, and marking those tokens as potentially dangerous spam.
Through multiple tabs, you can switch between, transactions, dex, leasing, and token creation tabs. It is basically an all in one powerful and fast client.
Also on this front, you can see the focus on user adoption and simplicity, while Ethereum is an overcomplicated programming nightmare that has lead to multiple hacks, fails and bugs, Waves client points with simplicity. Waves smart contract language called “rideon” will in their own words:
“Providing functionality for implementing the most-needed scenarios like multisignature wallets, atomic swaps, 2-factor authorization as well as more elaborate protections for coins. We’ll also introduce a Data Transaction: a way to post Oracle data to the blockchain, of course, available from within our smart contracts code.”
Technology wise you will be able to basically do anything at current times possible through blockchain: 2fa, atomic swaps, multi-sig wallets, votings, freezing, daps, and much more.
This will bring Waves to the highest possible standard while remaining a decentral blockchain.
Also much different to Ethereum it will be relatively simple to execute all the functions above.
“For example, people use Ethereum for ICOs because you can create tokens, but it’s actually a pretty complex, inefficient and expensive way of doing it. Tokens aren’t held in your Ethereum address: they’re registered to a smart contract and every time you ‘move’ them, you’re really updating the information that smart contract records. With Waves, a token is like WAVES itself — they are treated the same and are held in your address. Plus of course, we support token creation in the core and from the standard Waves wallet, which makes life an awful lot easier for end users. Then the tokens you create can immediately be distributed and traded on the DEX, with no further work. It’s a far more streamlined and useful approach.” –Ilya Smagin (Head of Waves smart contract Dev team)
Another Huge benefit of the Waves dex is their fiat Gateways, with this option you are able to send and withdraw Euro/USD to your bank account. This is another huge bonus and important for mass adoption. The process is at the moment a little complicated, but I am sure with time it will become easier and simpler to verify and connect fiat to the blockchain.
Still, a decentral exchange with fiat gateways is unique and very impressive.
The process is explained here:
Ah, Ecosystems, one of the most used terms, sadly a lot of projects just throw it in to sound amazing, an ecosystem is a lot of work.
Let us explain the Waves ecosystem, which is one of my favorite ones. Different to Bitcoin or other blockchain projects, all the Waves are already mined, this means the current total and circulating supply of 100 million Waves will never change.
Where do the node and leasing income then come from?
Purely from transaction fees, every time you send waves and or trigger a smart contract a portion of the waves will be distributed to the nodes securing the network, and that’s where we all get a share if we lease our Nodes.
You can think of it like a community-owned network where we all benefit from its growth.
Different to Ethereum and bitcoin where only the mining monopolies benefit, since it is not sustainable anymore to mine those currencies, you get a share of the growing network of Waves by simply holding and leasing ur funds!
The bigger the network, the more transactions, the more fees the more passive income.
While at the moment the income is sadly very low, due to waves high efficiency and its network not being pushed to the maximum yet.
You can think of a high tech road network without a lot of traffic on it, the investment of the road will only come to fruition once we see major traffic.
That’s why waves is a future blockchain, still, I am very certain that projects will see the advantages of this efficiency and more and more projects will either build on waves or move there.
The recent Ethereum clogging is just another sign of this, multiple icos are at the moment basically crippled due to high fees and slow network speed.
Waves will give Blockchain projects the speed and efficiency to actually start doing solid work for this world!
Also, you can watch the video of their last event in Berlin:
On YouTube: https://youtu.be/vUlGm5gMGAM