Why does WAX need its own protocol and blockchain?
Perhaps the most often asked questions when a token is launched are, “why do you need your own token?” and “why do you need your own blockchain?” These are understandable questions, since frankly, many projects out there really don’t need a token and are capitalizing on the current token craze. We’ll be going over exactly why the WAX token needs to exist and how we plan to make our token useful.
To understand why we need a new token for WAX, we need to understand what WAX will be utilized for. WAX is a token for gamers to trade in-game digital assets. Our experience from running OPSkins is that gamers have a very different set of needs than, say, the typical Bitcoin, Ethereum, or other cryptocurrency user.
We could, of course, attempt to create something like in-game digital items on the Bitcoin blockchain and do atomic swaps of those items against Bitcoin. But our experience running OPSkins leads us to believe that would have some serious potential problems.
Problem 1: Micro-transactions
It’s not a secret that microtransactions are currently pretty slow, not to mention expensive, on the Bitcoin blockchain. Even Ethereum, given the trajectory of its growth, is not well suited to micro-transactions at the scale that we would need. It’s true that interesting second-layer technologies like Lightning Network may make them faster and more cost effective going forward, but it’s near impossible to predict when such transactions may become standard.
OPSkins does 2 million transactions per week, is growing at a rate of 200,000 new registrations a month and we’ve safely and successfully completed over 150 million transactions for many millions of customers. We believe that WAX will have many multiples of that number when fully utilized going forward. Our customers need frequent microtransactions, and no blockchain that currently exists has the features that our customers need.
Problem 2: Technical Control
The second problem that we have is technical control. Bitcoin is a consensus-driven project, and it’s not entirely clear what features will be added when. Ethereum is controlled largely by the Ethereum Foundation, and it’s again not easy to add features to the platform that we may need. They are both great projects, but we won’t have enough influence over either coin to add the features that we need in a timely manner.
We envision our customers will be using WAX tokens on a daily basis, and we need technical sovereignty over our blockchain in order to be able to get them the features that they need. By creating our own blockchain that’s tailored to our customers’ needs, we’ll be able to move fast enough to make our token more useful, instead of waiting for the developers of an existing blockchain to accept our changes.
Problem 3: Understanding Gamers
We at WAX understand our gamers’ needs because of our experience at OPSkins. We know that they have a hierarchy of needs that simply aren’t met by the existing solutions. If we picture our customers’ needs, we can think of them like this:
It turns out that our customers at OPSkins value security above everything else. You may think in-game digital item trading is really simple, but in actuality, it’s really a laborious process. Most of the time, the gamers actually trading the items have to meet in-game in order to transfer the item. Payment also has to clear. Often, someone has to act as an transfer agent and hold payment at the same time until both are cleared. Security, then, is actually pretty difficult to achieve, and no blockchain actually allows for this particular use case.
Liquidity is also extremely important, but only if the transaction is secure. Most of the items we have on OPSkins are listed for an average of 10 seconds. The ability to quickly sell an item is really, really important, since most of the sellers would much rather be playing the game to earn skins instead of waiting for an item to sell. This sort of liquidity is only possible when there’s a marketplace that’s specifically tailored to the gamers in question. This is why OPSkins has been so successful, where eBay has not.
Convenience only matters if the above two are met. Again, our customers would rather be playing the game and earning more skins. Going through a terrible user experience to buy or sell an item on a different blockchain is going to take time away from what they want to do.
Finally, price matters, but not nearly as much as many people think. Oftentimes, prices for items are commoditized, and it’s pretty easy to determine what the fair price of something is given the above three. Most of our customers are not greedy; they just want to pay or receive a fair price for their items and play games.
While the idea of putting WAX tokens on another blockchain may appeal to some, our position is that our customers have needs that simply aren’t met elsewhere. We need to build different technical primitives that simply don’t exist yet. Our aim in creating WAX is to serve the needs of the customers that we already know very well.
We have an excellent team of highly experienced experts working on this problem, and our goal is to make WAX the most convenient, liquid, and secure marketplace for in-game digital trading.