Investment Analysis of Waves
The Waves Platform was founded by Sasha Ivanov, a Russian physicist. Here is some further background on the founder:
Sasha Ivanov graduated from Moscow State University in 2001, having studied in the Theoretical Physics faculty. He undertook further study at Leipzig University in Germany, and took an early interest in electronic currencies. From 2008–09 he was involved in programming bots to trade on the international forex markets, making use of artificial neural networks, later working on trading operations and neural network trading systems for banks.
In 2013 Sasha launched Coinomat.com, the first instant cryptocurrency exchange, and in 2014 created CoinoUSD, the first fiat-backed crypto token. In 2015, he launched Coinoindex.com, the first tradeable cryptocurrency index, and the Cryptoasset.fund blockchain-based venture fund, which held $200K under management.
In 2016 Sasha founded custom tokens blockchain platform Waves, which crowdfunded $16M (29,445 BTC).
In addition, in the article posted on Fintechprofile.com, Sasha discusses the actual problem the Waves Platform intends on resolving:
Although there has been a rapid growth in blockchain platforms in the last 2–3 years, none have been enterprise ready — each having shortcomings in one or other area. Waves was designed to overcome these problems and offer businesses a solution to allow them to access blockchain technology quickly and easily. It emphasizes a familiar user experience, the ability to create and trade custom tokens against each other, speed and scalability, as well as an active approach to business development and engagement. These features markedly reduce the frictions otherwise experienced by businesses and their customers when using existing blockchain platforms.
According to the Waves Platform Wikipedia, the platform is written in the Scala programming language “and built on its own blockchain with custom tokens being its main feature”.
What makes the Waves Platform especially unique is its use of what they call Custom Tokens or “Custom Application Tokens” (CAT). The CAT is a multipurpose cryptographically secure token, in that, the token can be used to store whatever value is assigned. Moreover, the token can be transferred and a store house of value for fiat and or digital currencies.
Advantages:
- Waves Platform, as opposed to other projects in the crypto sphere, is aimed at both advanced and novice users.
- The Waves Platform is running its own blockchain based on a Proof-of-Stake consensus algorithm.
- The platform is fully decentralized, transparent and auditable.
- Security, centralized exchanges are susceptible to hacks, theft, DDoS attacks and the like as a result, a decentralized exchange provide safety from these issues.
- Highly accessible
- Clean, familiar UX
- Chrome app or html lite client
- No blockchain download necessary
- Fast, low-cost and scalable
- One-minute blocks
- Low (0.001 WAVES) transaction fees
- Tx fees can be paid in tokens
- Up to 1,000 txs/second
- Fiat transfer
- Fully compliant, licensed gateways into and out of the blockchain
- EUR blockchain tokens, with USD and other currencies on the way
- Tokens fully backed by fiat deposits
- Bitcoin gateway and tokens also available
- Easy token operations
- Launch a new crypto token in under a minute
- Tools for mass token distribution
- Ideal for crowdfunding
- Decentralized exchange (DEX)
- Peer-to-peer trading from within the client
- Trade any pair of Waves tokens
- Near-real time order matching
- Blockchain settlement for security
- Smart contracts
- Non-Turing complete
- Powerful but secure
- Planned implementation Q4 2017
Disadvantages:
- The Waves Platform from an exchange perspective is not full mature, in that, there are not adequate amounts of buyers and sellers in the exchange compared to the larger more common exchanges like Poloniex and or Bittrex, however this is of course dependent on mass user adoption.
- Performance can potentially be an issue, but with recent events of regular exchanges having their outages, downtime, and supposed DDOS attacks this may be a moot point. Decentralized systems versus centralized systems is the same argument of local database versus a non-local database dependent on connection/network times could be an issue of latency. This “disadvantage” has been rebutted by Waves in their statement:
- “Orders are paired on a centralized basis by Matcher nodes. These execute a trade but have no access to funds. The trade is then settled on the blockchain for maximum security.”
- As a result, performance is still undecided, that is why I list it here as a possible issue.
- Support can potentially be another issue. Waves will need to adopt some sort of traditional support ticketing system for issues as no technology is 100% bullet proof nor perfect. All technology fails at some point in its lifetime and supporting users especially as DEX gain more popularity can be an issue that Waves will need to contend with. As current exchanges have below average support for their customers I am curious as to how Waves will address this potential issue. My understanding is that Waves does have some form of support, but the type of support I am referring to is world class top notch technical/client support where customer issues are resolved in a timely and efficient manner.
ROAD MAP
The Waves Platform team has published a blog post detailing their road map for 2017 which can be found at the following link: https://blog.wavesplatform.com/waves-updated-roadmap-2017-f5d75c8f33c7
- Here are some of the highlights from that post:
- Our goal is to take open blockchains mainstream and offer a stable platform for business and community usage.
- We work with law firms and regulators to make Waves blockchain a go-to place for business in need of a new layer of transparency and efficiency.
- It’s really important to help these fledging opportunities go mainstream. We work with licensed financial companies and regulators to enable fiat transfer on the blockchain.
- Fiat gateways are the entry point from real world into the Waves blockchain. When there you can issue your custom blockchain token literally in two clicks, and you can use it as a CAT, Custom Application Token, as a part of functionality of your application.
- It might be a gaming app with internal currency, loyalty reward program with bonus tokens, some kind of crypto vouchers
- You can also do an ICO, selling your CATs to investors and financing your platform development through the crowd sale.
- Securities laws are rather strict across the world, so you need to take special care with compliance here. We’re developing a centralized platform, Tokenomica.com, which is going to work on top of the Waves blockchain, and provide 100% compliant legal framework for different types of token crowdsales, including private equity crowdsales.
- To implement so many business features on the blockchain you need to have it ready for scaling and high throughput. We’re moving into that direction too, implementing an approach that allows to efficiently reduce local state storage having thousands of different tokens transferred across the network without a substantial overhead.
- We’re implementing throughput scalability approaches that allow to use the system bandwidth more efficiently and potentially can support tens of thousands of transactions per minute.
- To make a blockchain system really flexible and multi-faceted you need to have some kind of smart contract functionality. Current approaches might be great in theory but practically they face lots of issues with scalability and economic incentives. There’s another approach to smart contracts that can be pursued — namely a generalization of non-Turing complete Bitcoin scripting, which allows for all scripts with finite execution times.
Unfortunately, there were no hard pressed dates assigned to any of these future implementations and ideas.
PROJECTS
Waves is not only creating a decentralized financial exchange and marketplace platform with specialized tokens. They also partake in many projects, here is a list of the projects that Waves is a part of:
Starta
STATUS: ONGOING ICO
Starta Accelerator is an acceleration program launched by Starta Capital VC Fund in 2015. The mission of Starta Accelerator is to empower Eastern European frontier technology companies through exposing them to USA market.
The program was customized for Eastern European founders aiming to adapt to cultural and business environment in the US.
wBTC
STATUS: ACTIVE
The Waves BTC token (WBTC) represents bitcoin on the Waves blockchain. Bitcoin is the most popular form of money in the cryptocurrency world. Waves allows people to store and transfer it more efficiently due to Waves’ high speeds and low transaction fees.
Every WBTC token is 1:1 backed by bitcoin held in a secure multi-sig account.
Incent
STATUS: ACTIVE
Imagine a world where merchants could reward customers instantly, with a digital asset that never expires and appreciates in value. Would you not shop with a merchant who offered such a powerful reward?
This is what we call Open Value. We believe it holds the key to unlocking the latent potential of reward based marketing and we’ve developed the technology for merchants to deploy it. Rapidly, at no risk and low cost.
Darcrus
STATUS: ACTIVE
dAppsheet is a decentralized application that automatically replicates and decentralizes the underlying infrastructure for companies to tailor almost any traditional SQL database application to their specific needs. Instead of setting up redundant SQL servers everywhere with real-time streaming replication, servers, etc.
Companies will have full ability to change the UI to suit their distinct needs.
ZrCoin
STATUS: ACTIVE
ZrCoin is the first ever blockchain option for investing in the production of an in-demand industrial material. The token is not susceptible to inflation or typical cryptocurrency volatility, as such it is a reliable tool for the preservation and growth of capital funds.
The team is committed to complete transparency at every stage of the investment cycle, from production to deployment and ZrCoin buy-back.
MobileGO
STATUS: ACTIVE
MobileGo tokens will be used to gamify the mobile platform, and to incentivize gamers for loyalty and participation through rewards. MobileGo tokens will also allow for smart contract technology.
MobileGo tokens will allow for the development of a decentralized virtual mobile gamer marketplace, the ability for gamer vs. gamer decentralized match play, and decentralized tournaments run on smart contracts
CHALLENGES
There are two major challenges one immediate and another medium/long term:
- Over diversification of projects
- Mass user adoption
Over diversification of projects
It is clear that Waves is leading the field with innovative and leading-edge technology solutions, the only issue I see is that they may be too diversified and as a result attention could be potentially diverted from taking Waves to a level where it becomes the number one DEX on the market, no pun intended.
We must remember that there does exist competition in this space, Counterparty, Blocknet, Bitshares, Komodo. Now I acknowledge, Waves is becoming the clear leader but their interest and involvement in the various projects albeit a necessary part of the overall business strategy as Waves is also an ICO launching platform of sorts, may cause an issue.
I am all in favor of diversifying and channeling resources to projects that have viable and long-term potential for success. My trepidation is whether the Waves team is biting off more than they can chew. Only time will tell.
Mass User Adoption
Gaining mass user adoption will be a key initiative for the Waves Platform and will also help to legitimize it as the clear leader in the decentralized exchange space.
I am confident in the Waves team in their ability to execute out a marketing strategy that will gain mass user adoption. Execution is not an issue it is whether that strategy will be clearly accepted by the general public. Part of mass user adoption is on boarding the users. This again falls into technical and customer support. All factors to consider in a mass user adoption strategy.
If the user experience is sub-par they will go elsewhere.
CONCLUSION
In conclusion, the Waves Platform is positioning itself to be the clear leader in the decentralized exchange marketplace. They are however, not without competition and innovation will be the key to their long-term success. In addition, the challenges of over diversification and a clear plan and executing successfully on that plan toward mass user adoption are two other issues they will need to address.
The Waves platform has all the ingredients to continue onward and upward in a rising trajectory toward dominating as the premier DEX and financial trading platform. They clearly have a strong team and great leadership. The only true obstacle is themselves and whether they choose to over diversify into a host of projects that takes them from being phenomenal at one business endeavor. Focus will be the key factor and execution in gaining mass user adoption the other key toward Waves truly cre
