Waves Exchange
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Waves Exchange

RECAP: Sunday AMA about Waves.Exchange

The AMA was devoted to Waves.Exchange’s newly launched in-house token, WX, its utility and earning opportunities that it offers to users.

Introduction about the basics of WX

The main idea of the WX token is incentivizing people to bring liquidity to the exchange to boost trading volumes on Waves.Exchange, which is decentralized, but the design is similar to centralized exchanges. We want to bring the experience of centralized exchanges to the decentralized exchange. Just imagine Uniswap combined with Binance. But the system needs governance because in a truly decentralized system, there should be a way for the community to manage and control the system. We started with gWX, which basically is not exactly a token.

The locking mechanic of WX is not only a boosting mechanic, which was ready for the release. But it is not the main mechanic, and gWX is a governance token. Still, from the start, people can boost their APY in the pools. How does it work? If you have WX tokens obtained from the IDO or as “early bird” rewards or bought on the exchange, you can lock them for some period of time and receive gWX (governance WX). As a result, you will start receiving additional APY in the pools. Where is this APY coming from? If you look at the pools page, you will see that there is the basic APY — for the WX/USDN pool, it is 11.63%, for example, — which comes from trading activity in the pool and in the market. People buy and sell WX, and the spread forms the basic APY. Also, there is the reward APY, which is called the token APY, which comes from WX rewards.

What’s the maximum number of tokens that will go to the market? This thing will be managed by the community through governance. Now, 39 WX tokens are released every block. Only ⅓ of these tokens goes to the people who deposit their funds to the pools. If you just add liquidity to the pool, you receive ⅓ of these tokens every block. These basic tokens are divided between all liquidity providers to the pool, based on their share in the pool. 30% goes to the WX/USDN pool, 30% to the USDT/USDN pool, and the other tokens are distributed among the other pools. This is how we bootstrapped the emission of the token. ⅔ of the tokens go to users who boost their pool income. The maximum amount of tokens that could be released is 128.

Where are burning tokens coming from? On the stats page, you can see that a lot of tokens are burned. Half a billion tokens will be released in 5 years only if the initial emission is 128. But the initial emission is 39, so all other tokens get burned and they will never reach the market. So, the total emission will be 4 times less. If things don’t change in 5 years, instead of 500 million tokens, only 120 million will reach the market — as long as the users don’t change the emission curve. In the next release, we plan to add a mechanism for people to scale up or down the emission curve. So, people will be able to vote on how many tokens they want to release every block, so they can move the curve to be able to choose whether they want more tokens to be released to the market or less. This will be the first voting that we will implement.

Under the boosting mechanic, 39 WX tokens go to the market from the beginning for everyone and another 26 for users who boosted their pool income.

We think that thanks to the ability to move the emission curve, there will be the ability to change the weight of the pools, the ability to add pools, and this functionality will be released very soon. We really don’t want to shake everything or drop and break the mechanics, because if something goes wrong and it isn’t bootstrapped properly, people will be able to change things. For instance, they will be able to move all votes from the Waves/USDN pool to the WX/USDN pool, or reshuffle completely the weights of the pools. That would be a mess, and the system could become very unstable. That’s why we locked 1 million team tokens to prevent manipulations between pools. The team wants to make sure things work properly while people learn. We will educate people. This AMA is the first step in teaching the community on how these difficult mechanics work, on how they combine. While people are learning how it works, the team will hold 1 million tokens locked. From month to month, more tokens will be released, and in two months, people will hold many more tokens than what the team locked. And this will be the moment when we think that the community will be well educated, and will hand over the control over the pools, because at the beginning, the team must be sure that nothing is going to break, because if things go wrong we won’t be able to change it.

By locking 1 million tokens, the team decreased the amount of WX tokens coming for boosting for the pools. But with more locks, the share of the community locks will increase and this share will bring more tokens for boosting for the entire ecosystem. This means that people will get back their share and the locks will become cheaper, people who locked their tokens will get profits for more liquidity

At this point, it looks like it’s not attractive but it is still attractive and the best offer on the market. So, with more locks, people will get more governance power, boosting APY in all pools.

When we announced that we plan to raise $50 million in the IDO, nobody believed that, but we raised that amount because we understand the market and we understand how things work, because we have been in the market already for 5 years and we know how to build sustainable mechanics.

So, what happened when we locked 1 million tokens? People were able to lock 5 WX and triple their APY for staking $50,000. This is not correct, people were claiming pools and dropping into the market, and all these people became very angry when it stopped. We understand that those who were the first got very high APYs. But now you should understand that governance and gWX are not only about boosting. We are building a completely decentralized system where everything will be under community control. It’s the target for next year. But the community should get educated. The degree of misunderstanding the basic mechanics made me absolutely sure that the decision was correct. We could change the initial curve from 39 WX to the maximum amount. In the future, people will be able to do that. But what if we started from this, the pools would exist for a couple of weeks, then the amount of tokens on the market would become too large and instead of a sustainable product for 10–15 years, this would become a typical ETH-based farm where people collect their APYs and leave the project because too much tokens emission was brought to the market.

True, something didn’t work exactly how we wanted it to work. There were some interface glitches, calculator glitches. We are sorry for that. The team was working on this from the spring. This was a very difficult release, the whole ecosystem was involved to make things work correctly and fast. This is not just a rip-off of Uniswap, SushiSwap or PancakeSwap. We invented something new, this concept is unique. It was difficult to make it ready for mass consumption. Hundreds of thousands will join us in the future, I hope. We managed to meet the deadline, but yes, some bugs occurred. In the near future, we will fix everything. We always collect your feedback and take it to the development. We have the best team ever, which tries to deliver the best product with a super-bright future.

The AMA part

Q: Many people have seen their WX governance rewards for claiming reduced. What is the explanation for that?

A: This is due to the wrong design of the big lock. What happened is that everyone who felt that his reward was reduced will get the reward back. Nothing is lost, everything is in the contract. We will make an update and you will see that the amount you lost will be back, don’t worry.

Q: Seeing that the difficulty to get the x3 boost has increased a lot compared to last week, do you think it is still an option available for most users?

A: Yes, as I said before, people who boost their income can get much more now because there is still a bootstrapping mechanic. People still get triple APY, return their investments in 2 months and get a triple APY from the pools for a few years. It’s crazy, you have no similar options on the market. If you look at a 1 year period, this is the thing you should think about. If you need only 2 months, it’s really fast, so we can triple your APY to get back all you investment in WX in 2 to 2.5 months. With more locks, the investment return period decreases because the share of the 1 million decreasing the community share is increasing and they start to receive much more WX. So, with new locks, the speed of investment returns increases. The team got the governance control, and the boosting decreased, but the community now gets the governance control back, and with this, the APY will also return.

Q: In the Waves.Exchange stats section, we can see that a large amount of tokens are burned every day. Where do those tokens come from?

A: The current emission is smaller than the maximum emission, and the remaining tokens are burned. If the community votes to increase the emission, fewer tokens will be burned, and more tokens will go to the market. if the community decreases the vesting amount, then more tokens will be burned.

Q: How are the governance rewards distributed? How much is distributed and how often?

A: We are still collecting the fees we need to complete some software and the contract that will distribute everything to the gWX holders. The team address for gWX will be excluded from the contract, so all governance fees will be distributed between the users who locked WX. The team won’t get a share from this.

Q: Many users have the Waves.Exchange mobile app installed. When will it be possible to trade WX just like on the web?

A: We have two mobile apps, one for trading that can be used as a wallet, and an investment application. The pools will be added there as well, the work is already in progress.

Waves.Exchange for iOS

Waves.Exchnage for Android

WX Invest for iOS

WX Invest for Android

Q: When will governance functionality for gWX be available and will it be possible to add a pool with your own custom token by voting?

A: Yes, people will be able to qualify a token. There will be a full flow of token launches, this is a very special thing we are working on. If you didn’t know, you can issue a token on Waves.Exchange, you can create your own token and pay 1 WAVES for this operation. But people struggle because they issue a token and don’t know what to do next, they need trading, they need liquidity, they need mechanics to deliver their tokens to people. What users will be able to do with gWX, is not only about the boosting, the pool’s share and the curve of emission. People who hold gWX will be able to vote. Imagine that you have issued a token. First, you will see that you can apply for community approval, to verify the token, with gWX, then you will be able to make airdrops to gWX holders, make campaigns, then you will be able to make a pool with USDN, BTC and WAVES, then you will be able to launch another vote, for example, to make WX part of a pool to attract liquidity.

Q: When will paying fees in WX be possible?

A: Next week, we will activate this feature, all fees on Waves.Exchange will be payable in WX.

Q: Are you going to provide documentation for gateway operation in the public network?

A: Yes.

Q: When will paid listings for unverified tokens become available?

A: The Waves.Exchange team isn’t going to approve any tokens in the future. This is what the community will do. What we may do is add some ERC-20 tokens, but we don’t plan to verify or approve anything that was issued on the Waves blockchain, only gWX holders will be able to do that.

Q: When will the Waves.Exchange DAO be initiated?

A: Next year. We really want to incentivize products that will work on the Waves blockchain. Many different products can be done on top of the Waves.Exchange pools with the liquidity that is provided. That’s why we reserved a large amount of money in the DAO contract. gWX holders will decide which products will be funded.

Q: Will there be a bug hunter program?

A: We will announce a bug hunting program next month I think.

Q: Do you have a strategy to attract new users to Waves.Exchange in the short term? Similarly to swop.fi, liquidity quickly stopped growing.

A: Marketing, good APY, explainers, collaborations, partnerships — this is what we are working on.

Q: How are you going to integrate WX in investment products? Will it be possible to boost income from investment products with gWX?

A: Yes, this is another utility of gWX. You will be able to boost your income from other investment products with gWX. The mechanics will be announced soon.

Q: People are worried their boost won’t last longer than one month. Is there any guarantee that it won’t drop so quickly?

A: Your boost will stay there for a long time, and, as I said before, the team won’t lock anything else any time soon. We’ve learned the lesson that we should communicate properly. If we need to lock something else, we will communicate with the community beforehand.

Q: What will be the next IDO on Waves.Exchange?

A: I’ve seen a lot of different mechanics for IDO on various platforms. I really think it’s too complicated, but people on Waves.Exchange can already buy WX, lock it, receive gWX, and all IDOs will go through gWX.

Q: Are you planning to burn more WX ?

A: We don’t plan to burn more. The balance is good right now. After the first governance block release, when everyone with gWX can vote on the curve movement, you will be able to do it yourself. If you decide to increase the emission, we will burn less, if you decide to decrease the emission, we will burn more.

Q: When will MetaMask be integrated?

A: The Node team already has a build on the testnet where you can sign a transaction with the Ethereum signature. The release will be in late winter or early spring. We will add the ability to log in to Waves.Exchange through MetaMask and use all the services.

Q: When will you connect more networks, such as BSC, Cosmos, Matic and Solana?

A: The next big chain is going to be Avalanche. In Q1-Q2 2022, you will be able to move USDT and USDC through the all chains, not only to ETH, but through BSC.

Q: Do you think WX governance rewards are low? What is the plan for increasing the WX governance reward?

A: It’s not that large now, it could be raised 10 times. With more liquidity, more trades we will be able to reach 0.5 million fees at the same time.

Q: What are the advantages of Waves.Exchange over UniSwap?

A: Zero fees, very similar experience to Binance and other chains with the same AMM algorithm as Uniswap. If you go to Waves.Exchange’s WX/USDN market, you really see there are a lot of orders, and you trade at the same time with the AMM algorithm, and, using limit orders, with other people. So this is combines the experience of the two, and you don’t pay fees to the contract, you don’t pay fees to arbitrageurs, you just pay almost 0 fees for any amount you want to sell or buy, and you can do it very fast, and you can do it with an experience of a regular exchange. But it is decentralized, and that is a killer feature.

Q: You said that the higher the amount and the longer the WX token lock, the more gWX you will receive in return. Will there be a real and beneficial benefit from this waiting? In other words, will the return from waiting be noticeable?

A: For example, you have 100 WX and you lock it for 2 years you receive 50 gWX. If you have 100WX and lock it for 4 years, you receive 100 gWX. To get the maximum boost, you need 4 times less WX tokens, if you lock it for 4 years. If you lock it only for one year, you need 4 times more WX. It’s for you to decide when you make the investment if you want to maximize your APY right now. In that case, you lock WX for a longer time but you get your investment in 2 months.

Q: What about a WX launchpad?

A: There will be a launchpad. All you need to take part in it is to just hold gWX.

Q: For two days, there a a large proportion of LPs have not boosted, and by reading the lightpaper, if I understand right, it should increase the burn/boost ratio, up to almost the whole release boost value, which is 2*ReleaseBase. However, watching the stats, the burns did not vary the last two days compared to the previous days. Why?

A: Many people who bought WX in the IDO are selling right now because they made x20 on the first days and they are trying to recoup the initial investment. This is a success of the IDO. A lot of these tokens will be locked. And I am sure that people will start receiving gWX tokens by locking WX, and the amount of gWX will increase and the boosting will be reshuffled, and the emission curve will be changed. That’s how the burn function will work.

Q: The USDT pool is currently 5–7x easier to boost than the other pools. Will this be adjusted and how will the adjustments look?

A: This is math. The more liquidity in the pool, the easier to boost your income. If there is more liquidity in the pool, the reward APY will decrease and the boosting power will increase because now you already have a large APY and it’s hard to boost.

Q: Do you plan to provide perpetual trading?

A: Yes.

Q: Do you plan to increase the taker fee to 0.1%?

A: No.

Q: The first time I locked WX for gWX, I went for 4 years. Now, I can’t lock for less time than that. Will that change in the future?

A: If you once locked from you account, you can start to lock from another account or you can just continue to lock but you can’t decrease the period of the initial lock.

Q: The WX tokens slated for marketing and investors have not yet been claimed. What plans regarding them? Will gWX holders also decide their “fate” or usage?

A: The Marketing budget will be governed by the community investors. If you want to make some airdrop or a referral program, we will discuss it with the community.

Q: Does the WX price affect the amount of WX having to be locked to receive full boost? If WX drops 50%, do we need to lock 2x next month?

A: No. The cheaper WX, the cheaper the boost itself.

Q: Is the WX amount for boosting going to change soon, like on a daily basis?

A: This is something that you will decide. You also need to communicate to each other.

Q: When you launched WX, a huge part of liquidity providers on swop.fi switched to the Waves.Exchange pools. Do you think you killed swop.fi?

A: I don’t think so. If you are a single girl in the bar, you don’t need to work much to get some attention. I think that the swop.fi team now has the motivation to make it even better. It’s a good project. True, in some way, we are competing right now, but we are also a good combination.

Q: Will USDC pools be added?

A: Yes.

Q: When can we expect paper v2?

A: In Q1.

Some words about NSBT

NSBT has a special role in the ecosystem. WX has the power to manage products on Waves.Exchange. NSBT will control all the funds in the Neutrino smart contract, 50 million of WAVES is there. What will happen next, people will be able to vote for the new nodes, for the amount of WAVES that could be listed to these nodes and get the profit from the USDN conversion to WAVES and back. NSBT holders will distribute and control the whole funds in the contract, they can’t withdraw these funds, but they can decide where they can go and how many more Neutrino nodes will be launched by the community in a completely decentralized way. We are working on the software for the contract, which will be released next year. If NSBT holders control more than 50 million of WAVEs in the contract and all of these 50 million is released, that means that NSBT holders will control the network, because 51% of WAVES will be in the contract.



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