WAVES is a decentralized blockchain technology that was designed for custom blockchain token operations. WAVES proposes other uses of blockchain tokens since the high liquidity and high volatility caused by the establishment of Bitcoin as a valid monetary system, will prevent the store of value in other emerging blockchains. WAVES is designed to realize the untapped potential in a classical coloured coin approach. The compliant gateway operators enable national currency transfer under the WAVES blockchain platform. These tokens facilitate exchanges such as fundraising, crowdfunding, and trading of financial instruments.
When the blockchain assets and coloured coins emerged to complement the growing number of protocols utilizing Bitcoin’s blockchain, an invention known as Nxt was also developed to build a custom blockchain token platform from scratch. WAVES developed the incorporated the approach taken by Nxt to realize the creation of custom tokens and transfer through attachment added to blockchain transactions. This approach enables the implementation of new transaction types. However, this approach was met with the issue of a mandatory hard fork, whereby network clients were required to update their software to support new transaction types.
WAVES approach to this problem was to introduce new transaction types through plug-ins that were installed as an extension but did not exist in the core software module. This allowed clients who did not have the relevant plug-ins installed to relay such custom transactions, and for third party developers to launch new transaction types that were integrated into an ecosystem. The most basic transaction types were carried out at the core level. Such transactions included the creation, deletion and transfer of custom tokens, decentralized token exchanges, in an auction like ecosystem, are matched, and anonymity features, which are an industry grade trading platform.
WAVES asset-to-asset trading opens up opportunities in the emerging ‘Token Economy’. This platform creates room for trading against tokens which have been tied to national currencies and thereby replicating traditional trading infrastructure. WAVES advocates for using Bitcoin as a currency in order to provide sufficient liquidity and mitigating the volatility that is preventing the use of decentralized money. For fears of hidden centralization surfacing, WAVES is opposed to the “market peg” approach.
WAVES platform does not allow for lightweight nodes to download the blockchain, but instead payment verification and network interaction relies upon full nodes. Simplified payment verification procedure is designed for lightweight nodes by adding an extra layer of security. It’s built on the Scorex Platform developed based on the state of the network as an alternative to the full transaction.
WAVES uses a Proof-of-Stake protocol as a consensus algorithm. The decision to use this consensus algorithm is based on its success on the Nxt platform. However, WAVES is attempting to enhance the protocol to reduce the transaction time and increase the transaction thoughtput – Leased PoS (LPoS). WAVES will provide a Dao-like experience without losing a technical point of view, when managing community projects.
What is WAVES blockchain? Pros and cons: