Fundamental Analysis of Waves (WAVES)

By Bronson Tang and Pink Panther

July 12, 2017

Waves Facts:

Look at who is the team

Have full time developers?

YES

What is their business idea

Open blockchain platform, decentralized marketplace & exchange.

What is so unique about it?

Open blockchain platform, decentralized marketplace & exchange using customized tokens.

Who is their competition?

Do they have a working prototype?

YES

What’s their roadmap

YES

Do they have strategic partnerships?

YES

Are they well budgeted? Did they raise enough money to survive?

YES

Innovation or Imitation?

Innovation

Business Model? (Speculative and or Residual)

BOTH/HYBRID

What is it? Protocol/Application/Silly Coin?

Protocol

Contact us on website, where are they located?

NO

MARKET DETAILS

Main Category (Large/Mid/Small Cap)

Mid Cap

Sub-Category

What is the price currently? Room for growth or at peak?

$2.52
 0.00109022 BTC

What is their market cap?

$252,202,000 
 109,022 BTC

What is their coin supply?

100,000,000 WAVES

What is the circulating supply?

100,000,000 WAVES

What is the 24-hour volume?

$3,463,240
 1,497 BTC

Are they going to lock their coins in escrow?

UNKNOWN

TECHNICAL DETAILS

Do they have a GitHub where the software is checked in

YES

How often do they check their software

2 Days

What is their algorithm? POW, POS, POI, or D-POS?

Leased POS

check in dates and how active?

YES

See developer ratings.

YES

SOCIAL MEDIA FACTS

Is their website good? Blogs updates, Twitter Updates, YouTube channel?

YES

How many telegram/forum users?

3578

https://t.me/Wavescommunity

How many Twitter users?

10,300

How many Facebook viewers?

26,956

https://www.facebook.com/wavesplatform

How many YouTube subscribers/viewers?

1,470

Overview:

Question:

What is Waves?

Answer:

Waves is an open blockchain financial trading platform & decentralized marketplace using customized tokens.

In this Analysis, I will address the following:

1. What is Waves?

2. Advantages

3. Disadvantages

4. Road Map

5. Team

6. Projects

7. Challenges

8. Trend Analysis

9. Conclusion

WHAT IS 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).[1]

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[2] programming language “and built on its own blockchain with custom tokens being its main feature”. [3]

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. [4]

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, html lite client or mobile version for iPhone
  • 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[5]:

· 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.”[6]

- 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. Meanwhile Waves do have kind of public ticketing system.

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.

o It might be a gaming app with internal currency, loyalty reward program with bonus tokens, some kind of crypto vouchers

o 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 [7]times.

Unfortunately, there were no hard pressed dates assigned to any of these future implementations and ideas.

TEAM

SASHA IVANOV, CEO AND FOUNDER

A physicist by education, Sasha Ivanov has been involved in Internet payment systems software development and neural network prediction software for financial markets. 
 
 After the emergence of blockchain technology he launched the first instant cryptocurrency exchange coinomat.com, the first fiat blockchain token coinoUSD, and the first tradable cryptocurrency index coinoindex.com

GUY BRANDON, SEMANTICS ENGINEER

Guy Brandon (@cassius) is a UK-based writer and communicator who has been active in the cryptocurrency world since early 2014. He is Editorial Director for BitScan.com, the largest crypto directory and marketplace in the world, and specializes in making complex ideas accessible to mainstream audiences. 
 
 He has created film scripts for banking and computer security companies, as well as contributing to white papers and marketing materials for software agencies.

ALEXANDER BEZKROVNY, COMMUNICATIONS

Alex (@bezbezbez / @wavesplatform) has been in the Bitcoin scene since 2013, and a long-time Nxt community member. 
 
 In the WAVES team, he collaborates on the PR front using his skills as marketing ninja.

CARLOS M. PARADA, BRAND MANAGEMENT

Carlos (@eth) is a multifaceted designer who embodies a variety of skills, from architectural drawing and visualization to 3D digital prototyping, website/app design, UI/UX development, etc. and owner of BEYOND VISUALS studio. 
 
 He has collaborated in the past with brands including Hilton Hotels Group and Kompas Gramedia. In the crypto scene, he’s known for developing the front-end of the first superNET Lite Client versions as well as its initial branding.

MARTIN SPODYMEK, HEAD COMMUNITY MANAGER

Martin (@mx) is an engineer who graduated from the Automatics and Robotics Department at Wroclaw University of Technology. He is fascinated by blockchain technology and cryptography as a whole, and by cutting-edge marketing techniques. 
 
 From 2015 he has been the CEO of the Coremedia.info project. Martin supports WAVES with many skills, from tech support to marketing.

ALEXEY KISELEV, BACK END DEVELOPER

Alexey Kiselev is a passionate programmer who started programming 8-bit processors in the dawning age of computers. Alexey graduated from the Moscow State Technical University at the end of 20th century, after which he worked as a software developer for different banks and payment system providers. 
 
 He was a team leader and the owner of a small company, and is a hobbyist long distance runner.

SERGEY ISHCHENKO, FRONT END DEVELOPER

Sergey (@beregovoy68) is a Software Engineer who specializes in Java with over 10 years of experience. His portfolio includes Finance and Banking projects related to Transaction Processing and Payments. 
 
 His main responsibility on the WAVES project is Lite Client development and Distributed Team Coordination. He is a big fan of Agile methodologies, which is why he implemented SCRUM into the Lite Client team.

ALEXEY KOLOSKOV, BACK END DEVELOPER

Alexey (@koloale) is a software developer with more than 12 years’ experience in different Internet, Telecom and Banking areas. He has broad experience in developing and leading full-fledged mobile and web applications from the ground up. 
 
 In his everyday work, he aims to use cutting-edge technologies and is always willing to learn new programming languages and tools.

SERGEY TOLMACHEV, BACK END DEVELOPER

Participated for more than 4 years in the development of backend applications for the Web, Big Data and FinTech projects using Scala. Prior to that, Sergey used a number of languages, methods and approaches to software development, before focusing on Scala. 
 
 His first project for Bitcoin, btcpay.ru, launched in 2011. Since then he has watched with interest the development of the market and was happy to join the Waves Team.

CYRILLE WETTER, COMMUNITY MANAGER

Cyrille (@karlkarlsson) has been a long-time Nxt community member and supported different community projects for several months. He found his passion for digital currencies during the time he worked for a major Swiss financial institution. 
 
 Currently, he is an undergraduate studying for a bachelor’s degree in International Management. Within the team his responsibilities lie in community management, translations and marketing of the WAVES platform.

TED CHENG, CHINA COMMUNITY MANAGER

Ted Cheng (@allwelder) is a IT Equipment Engineer working in the Chemical Industry in China. He has been an enthusiastic fan of cryptocurrency since early 2013. He is also the co-founder of Blockchain.hk, a Chinese blockchain tech news website. 
 
 He actively pays attention to and promotes the development of blockchain technology in China, and firmly believes that it will change and improve many aspects of our world, including the financial industry, IoT, and more.

PHIL FILIPPAK, FRONT END DEVELOPER

Phil (@xenohunter) works professionally as a software developer for 5 years, has interest in game development and machine learning, participated in several coding competitions. He has skills in many areas including management, music and English writing. 
 
 His main responsibility is to develop Waves Lite Client and contribute to the client-side API library.

EVELINA LAVROVA, MARKETING & PR NINJA

Eve (@evelinalavrova) has more than a decade of experience in Marketing, PR and Business Development. Prior to that she was CMO at Pay-Me, promoted Yell.ru and launched Gett in Russia.
 
 She holds a BA degree in Marketing.

Alexandra Pestretsova, Chief Marketing Officer.

Alexandra Pestretsova is a veteran of the digital and gaming industries, with 15 years of professional experience — including eight as a marketing director.

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:

1. Over diversification of projects

2. Mass user adoption

a. Marketing

b. Community

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.

1. General Stats

a. Created: March 2016

b. Headquarters Location

i. Moscow

c. Mission:

i. To provide decentralized financial exchange platform and marketplace with specialized tokens.

d. Coins Supply

i. 100,000,000 WAVES

e. Market share price as of July 11, 2017

i. $2.52 
 0.00109022 BTC

ii. Market cap as of July 1, 2017

1. $252,202,000 
 109,022 BTC

2. Ranked 17

2. Who is the customer base?

a. Crypto investors, technology enthusiasts

3. Strategy to Gain Adoption

a. Unknown

TREND ANALYSIS

The statistic shows the largest stock exchange operators in the world as of March 2017, by market capitalization of listed companies. Market capitalization, also known as market cap, is a term used to denote the total value of tradable shares of a listed company. It is calculated by multiplying the share price by the number of outstanding shares. As of March 2017, the NYSE Euronext U.S. ranked as the largest by market capitalization with a value of tradable shares amounting to 19.22 trillion U.S. dollars.

Largest stock exchange operators worldwide as of March 2017, by market capitalization of listed companies (in trillion U.S. dollars)

The statistic shows the leading stock exchanges in Asia-Pacific in 2016, by domestic market capitalization. In that year, the BSE (Bombay Stock Exchange) Limited located in India had the fifth largest domestic market capitalization of stock exchanges in the Asia-Pacific region, with a domestic market capitalization amounting to approximately 1.57 trillion U.S. dollars.

Leading stock exchanges in Asia-Pacific in 2016, by domestic market capitalization (in billion U.S. dollars)

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 creating a huge tsunami in the DEX marketplace.

[1] http://fintechprofile.com/2016/12/28/sasha-ivanov-waves-platform/

[2] https://en.wikipedia.org/wiki/Scala_(programming_language)

[3] http://www.waveswiki.org/index.php?title=What_is_Waves

[4] http://www.waveswiki.org/index.php?title=What_is_Waves

[5] https://wavestalk.org/general-discussion/waves-dex-vs-centralized-crypto-exchanges/

[6] https://blog.wavesplatform.com/what-is-waves-dex-7c311d1360a1

[7] https://blog.wavesplatform.com/waves-updated-roadmap-2017-f5d75c8f33c7