Why Investors Should Pay Attention to Waves
Despite the proliferation of cryptocurrencies and ICOs over the last 5 years, the process of undertaking an ICO and getting funding is still not nearly as simple as it should be. There are complex regulations and heavy amounts of friction that make it hard for the “crowdfunding” model of startup financing to occur.
Waves is a platform (with an eponymous token) whose aim is to solve this problem by launching a decentralized cryptocurrency trading platform and opening more gateways between other cryptocurrencies and fiat currencies.
The Waves Team
The team at Waves are planning on changing the crowdsale model to make it much less complicated for companies trying to get funding. The team operates out of Switzerland, but is run by Russians (the CEO, Sasha Ivanov, is a trained physicist with a strong past in the cryptocurrency space).
The Progress Waves Has Made
Waves’ ICO occured in April 2016, with 100 million tokens being issued. 85% of the tokens went to ICO investors, with the remainder going to strategic partners, Pre-ICO bounties, and internal development and marketing.
Since then, there have been considerable advancements in the power of the network. Their DEX launched in April 2017 with various gateways (both fiat and crypto) being unveiled in the following months. This has made it much simpler to get money into the exchange, thus breaking down funding barriers for any protocols issued on the platform.
Understanding the Business Model
Waves is all about helping companies obtain funding for their projects, and all of their work has been focused on this singular goal. Tokens need to have a specific use or utility in order to justify their existence, and the Waves token has been designed to fulfill this condition.
You can either pay a fraction of a WAVES to transfer tokens or buy a token, or you can spend 1 WAVES to create a new token on the network. Additionally, there are rewards on the network for tokenholders based on their balance of WAVES. The incentive structure is clear in this protocol: owning tokens helps you trade or create tokens, which is the purpose of the platform. The tokens may also be used to run smart contracts, which is why many consider WAVES to be a competitor of Ethereum.
The End Result
Waves tokens are currently trading at approximately $1.70, although it has reached peaks above $16.00. This sharp drop-off in price can largely be attributed to the phishing scam that has occurred in the last few days. Last month they were hacked when their CEO’s passport was falsely reproduced and used to obtain access to the domain and obtain the personal information of customers. Although the facts currently being reported make it sound like the fault lies with the domain provider, this is not the sort of issue that should be happening in a trading exchange.
In addition, Waves currently has limited KYC requirements and allows users to trader without submitted extensive identification information. This can be seen as a positive thing or a negative thing, depending on where you are standing. Yes, it is great that there are few barriers to entry for anyone who would like to trade on the DEX, but it is also likely to attract the ire of regulators in the USA. With a token that is strongly linked to this exchange, it is definitely something to pay attention to.
With the goal of creating a network of new tokens that are all interconnected and tradeable, Waves certainly has its worked cut out for it. However, with this recent drop in price due to security issues, it might be a great time to buy some tokens.
Featured image courtesy of Shutterstock.