As Smart Contract Platforms Make Waves, Waves Makes A Smart Contract Platform



            

Waves operates a Smart Contract Platform (SCP) founded in 2016 that allows users to store, trade, and mange their own digital assets using their native currency WAVES and the Waves client incorporating a multi-currency wallet, a system for releasing tokens, and a decentralized exchange. According to the Waves website (https://wavesplatform.com/), over 4,500 tokens have been released on the Waves platform accounting for over $1 billion in market capitalization. The Waves network uses a Proof-of-Stake consensus algorithm that rewards participants who “stake” their currency with a commission from the transactions made on the network. Transferring funds or placing market orders incurs a minimum fee of 0.001 WAVES and issuing new tokens costs 1 WAVES, with commissions paid to those who have staked their WAVES tokens.

            Founded by Alexander “Sasha” Ivanov in 2016 with Phil Filippak as Lead Front-End Developer, the Russian platform aims to create an infrastructure for entrepreneurship out of tools for blockchain development. 2, 4 Ivanov also founded coinomat.com in 2013, which now allows Waves users to exchange their WAVES tokens or other tokens issued on the Waves network for fiat currency and Filippak formerly worked as a Front-End Developer for Labicom and iBank Global, in addition to freelancing services. 3 Other notable employees include Marketing Director Alexandra Pestretsova, also the owner of Influencer marketing agency and former Director of Marketing at My.com, and Product Director Igor Pugachevsky, a former Product Designer at UMSTEL and SuperJob.ru. 5, 6

            The Waves white paper conveys an enterprise-ready focus on the functions enabled by custom blockchain tokens or “colored coins.” Custom token creation and transfer protocols still require a centralized party to maintain liquidity for new tokens so existing financial institutions can be encouraged to provide liquidity for fiat assets and maintain KYC/AML records while new types of transactions can be enabled without the need of a hard fork, creating a more stable, scalable network.
In October, 2017 Waves plans on releasing Waves-NG, a new consensus algorithm incorporating a mechanism that pre-selects the next miner to add a block to the blockchain, increasing the amount of transactions that can be processed in a second into the hundreds. 7 For reference, Bitcoin can handle about three transactions a second compared with Paypal nearing two hundred and Visa topping sixteen hundred. 8

            The upgrade will take Waves closer toward their plans for Tokenomica, an organization promoting regulation-compliant crowdfunding on the Waves platform. 7 Other planned upgrades for 2018 include support for multi-signature transactions and an encrypted blockchain-messaging system and Waves recently enabled support for Litecoin and Zcash so Waves users can now store Litecoin and Zcash in the digital wallet on their Waves client and trade them in the decentralized exchange. 10 In 2017, Waves partnered with Deloitte, the professional services firm offering audit, consulting, tax, and advisory services to international clients, including a majority of Fortune 500 companies, to assist with ICO services and custom blockchain solutions and announced an exciting collaboration with the Blockchain Institute, Cyber-Security Researchers Bingsheng Zhang and Hong-Sheng Zhou, and the Ergo platform to create a blockchain-based voting system they call “liquid democracy.” 9, 11

            It has been interesting to see the association of SCP's with specific countries like the NEO platform in China or Waves in Russia. Scalability will certainly become a factor in the longevity of these platforms once they see enough use to compete with the transaction rate of commercial enterprises like Visa, a problem we've already begun to witness on the Ethereum blockchain, but the race toward adoption will begin affecting the lifespan of platforms before scalability becomes an issue and given that regulation and economic instability have proven to be the most significant factors contributing to the adoption of new currencies, SCP's associated with major countries stand a better chance of sticking around longer than non-affiliated SCP's.

            On the other hand, the association of SCP's with centralized governments doesn't exactly jive with the visions of decentralization that have driven so many of the individuals who developed this revolutionary technology. Governments and businesses may gain increased tax revenue or profits and regulatory oversight from state-affiliated SCP's but once a large enough portion of society understands the benefits of a purely democratic, fully-decentralized, scalable SCP offering financial services with no middleman it would be difficult to imagine a world without one. In spite of its association with Russia, Waves has maintained an international approach that should allow it to remain a contender for the foreseeable future.





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