What is Waves?

Waves is a blockchain ecosystem that includes a cryptocurrency (WAVES), a token launch platform, and a decentralised exchange (DEX). The project’s creators intended to deliver a toolkit to help create Web3 decentralised applications (dapps). The project aims to develop an easy-to-use Ethereum alternative to increase blockchain adoption.

A brief history of Waves

Russian scientist Alexander Ivanov — also known as Sasha Ivanov — established the Waves project in 2016 after an initial coin offering (ICO) that garnered 30,000 BTC (then around US$22 million). In April 2016, Waves generated 100 million tokens, using a crowdsale launch approach. About 85% of the supply went to sale participants, 4% to partners and supporters, 9% to the developers, 1% to early supporters, and another 1% to bounty schemes that occurred after the ICO.

The Waves network, which was released in the third quarter of 2016, features the capacity to assist custom token generation and the administration of digital assets. The network aims to solve the inadequacies of current blockchain systems, which had previously hampered commercial adoption. As a result, Waves prioritises speed, scalability, security, and user experience.

In 2017, Waves began working with Microsoft Azure and became a Deloitte official partner. Towards the end of the year, it also introduced Waves-NG, a new protocol based on Cornell professor Emin Gün Sirer’s Bitcoin-NG proposal. Waves-NG boosted transaction throughput to 100 transactions per second. In 2018, the business introduced a new mobile application that enables smartphone and tablet users to access the majority of Waves’ most popular features.

In 2020, Waves released the WAVES token as an ERC-20 standard asset, launching its interoperability with the Ethereum network.

Today, the blockchain platform provides purpose-built tools to aid in the development and deployment of dapps, and hosts a variety of apps and use cases ranging from decentralised exchanges (DEXs) and algorithmic stablecoins to DAOs, encrypted messaging, and gaming.

How Waves works

The Waves network uses its proprietary Waves-NG protocol, which serialises transactions and offers important improvements with lower transaction latency and higher throughput of bandwidth, without sacrificing other properties. The network improved its scalability by providing miners with the ability to farm a block in a continuous manner during the time of mining. This block continues in increments called liquid block, which is unchangeable over time once the next referencing block is created and appended.

Waves also uses the leased proof of stake (LPoS) consensus algorithm, which sets the probability of generating the next block in proportion to the size of a miner’s share of the total WAVES token supply. A miner who has more tokens owned or leased to them by other stakers has a better chance of generating the next block.

The Waves network has hundreds of nodes distributed worldwide, ensuring that blockchain data is protected against counterfeit or deletion. Anyone can launch a node and join the network, and a node that holds at least 1,000 WAVES can participate in block generation and receive block generation rewards and transaction fees.

What is Waves used for?

WAVES, the native token on the Waves blockchain, can be used to issue custom tokens on the network, provided that an account has enough WAVES tokens to pay for token creation. Custom tokens created on Waves can be transferred between accounts, traded on Waves.Exchange, and used as payments on dapps.

Block generators on the Waves network can receive transaction fees and block rewards in the form of WAVES tokens, encouraging generators to maintain and develop the blockchain network infrastructure. The more WAVES the generator holds, by ownership or leasing, the greater the chance to add the next block.

In the context of the Waves network, a lease happens when a WAVES token holder delegates their holdings to another block generator, therefore increasing the chances of that generator receiving rewards for their work on the blockchain.