What is the WAVES Platform?
Last Updated: 1st November 2018
WAVES is a decentralized blockchain platform that allows for the creation of custom blockchain tokens. This in effect allows users to create and launch their own cryptocurrency using the WAVES Platform. In addition, WavesDex, a decentralized exchange built on top of the WAVES Platform, allows users to trade their custom tokens against each other or against other cryptos and fiat currencies such as: BTC, ETH, USD, EUR and CNY.
Utilising its unique two-tier architecture to operate, the WAVES Platform uses Leased Proof-of-Stake (LPoS) as its consensus algorithm, and possess the following specifications:
- One-minute block times/
- Transaction fees of 0.001 WAVES
- Up to 1,000 txs/s
At the core level, the following transaction types are supported by the Waves Platform:
- Custom token creation, deletion and transfer
- Decentralized token exchange
- Anonymity features
However, new transaction types can be introduced by third-party developers in the form of plugins.
The WAVES Platform uses a two-tier architecture system in which two types of nodes are able to operate on the Waves network, a full node and a lightweight node.
Lightweight nodes are intended for systems that do not have the sufficient resources to become a full node. Lightweight nodes do not download the entire WAVES blockchain, instead, they rely on full nodes for payment verification and various network interactions. Furthermore, lightweight nodes also utilize a simplified payment verification procedure with the intention of providing an additional layer of security. Lightweight nodes are also able to collect transaction fees from every block added to the blockchain.
Full nodes, however, are systems that possess the sufficient resources necessary. Full nodes are required to download and maintain a copy of the WAVES blockchain. Lightweight nodes rely on full nodes to have the correct and most up-to-date version of the blockchain, and so, it becomes important for full nodes to operate correctly.
Leased Proof-of-Stake (LPoS)
The WAVES Platform uses the consensus algorithm, Leased Proof-of-Stake (LPoS). LPoS is an enhanced version of Proof-of-Stake, and has shown to result in reduced transactions times and increased transaction throughput.
In a regular PoS system, each node that holds a certain amount of cryptocurrency is eligible to add the next block to the blockchain. However, in the LPoS system, on the WAVES Platform, lightweight nodes can lease their balance to full nodes. The larger the amount that is leased to a full node, the higher the chances of that full node being selected to produce the next block. If that full node is selected to produce the next block, the lightweight node will then receive a percentage of the transaction fee that is collected by the full node.
WavesDEX is a decentralized exchange that runs on top of the WAVES Platform. Users can trade customized tokens, cryptocurrencies and fiat currencies against each other. Each node contains a matcher that stores user’s orders and sends token exchange transactions for filled orders. For security purposes, all final trade settlements take place on the blockchain.
An advantage of WavesDEX is: funds are always stored in a wallet. Therefore, users always retain full control of their funds when trading over a decentralized exchange. In addition, orders are transferred to the matcher across an encrypted channel and will not be visible to others until it is executed. This largely eliminates the possibility of market manipulation.
Potential use cases for the WAVES platform includes:
- Decentralized financial instruments
- Creation of national currencies
- And many more.
WAVES as a platform allows for large amounts of creativity. It is simply down to the user on what it is they want to create.