WAX (Worldwide Asset eXchange) is renowned for the exchange of digital assets and is currently the most traded and widely used blockchain ecosystem for dApps, NFTs and video games. Gaming companies like SAW, Mattel, Atari, and Street Fighter are using blockchain to sell their digital assets in the virtual gaming ecosystem. WAX is also home to OPSkins, a leading global brand that buys and sells digital products.
Compared to other blockchain networks, WAX offers faster transaction speeds, enabling multiple transactions per second, and reasonable gas fees that are significantly lower than other blockchains.
We bet you don't know that WAX is a certified carbon neutral platform?
THE WAX is would be 66,000 times more effective than Ethereum or Bitcoin. Compared to energy-intensive PoW mining operations of Bitcoin or Ether, NFTs in this ecosystem have helped offset approximately 4 million tons of carbon emissions. The main grid of its ecosystem emits 211 tonnes of carbon dioxide per year in exchange for 473.04 MW/h. Carbon credits generated by WAX blockchain operations fund environmental initiatives around the world.
In this article, we will look at how the WAX blockchain works, what its selling points are, and the challenges it must overcome to achieve its goals. Let's go.
How does wax work?
The WAX blockchain uses a Delegated Proof of Stake (DPoS) consensus mechanism that combines elements of proof of stake (PoS) And proof of work (PoW). This DPoS model, compatible with EOSIO, enabled WAX to achieve high transaction throughput and scalability. The blockchain's native token takes its name and is an integral part of its operations in specific ways.
In WAX's DPoS system, there are 21 active block producing nodes called WAX Guilds at any given time. These guilds are elected by WAX token holders through a continuous voting process. The 21 guilds take turns producing blocks in sets of 126 blocks, with each guild producing six blocks per turn.
![](https://defi-planet.com/wp-content/uploads/2024/05/WAX-Homepage.png)
In addition to the 21 active guilds, there are 36 standby guilds that act as relief block producers. These backup servers are randomly assigned blocks to produce, incentivizing them to stay online and ready to operate. For a block to become permanent and immutable, it must be signed by 15 of the 21 active guilds, providing Byzantine fault tolerance.
WAX guilds that fail to produce at least 50% of their allocated blocks do not receive the associated block reward and risk being rejected by token holders. Conversely, token holders can maximize their “WAX Staking Rewards” by voting for the best performing guilds. Staking rewards earned are directly proportional to the performance of the voter-selected guilds.
The WAX ecosystem presents the WAX Cloud Wallet, which offers more features than a typical cryptocurrency wallet. The Cloud Wallet allows users to view token balances, stake WAX, vote for guilds, claim rewards, and manage their WAX NFT holdings, all without having to store private keys. It also allows single sign-on integration with accounts like Google, Facebook, etc.
The Cloud Wallet is free for users and implements anti-spam measures such as multi-factor authentication and account scoring. Overall, it aims to provide a unified and user-friendly interface to access all features of the WAX ecosystem.
There is also a Wax Lab, a venture-style platform where developers can pitch concepts and submit proposals for evaluation. Once a project idea has been submitted, WAX Labs users and token holders can vote on it. The more coins a user has, the greater the weight of their vote. 10% of eligible voters must vote for a project to be funded, and 50% of those voters must approve of its creative potential.
WAX Unique Selling Points
The WAX project represents an important step towards the widespread adoption of blockchain technology. Focusing on the digital goods/NFT market, which spans video games, collectibles, and tokenized consumer products, WAX targets applications that have immense demand and potential for mass consumer usage.
Based on the fact that online gaming is booming around the world, the project's development team estimates that digital assets represent a $2 trillion opportunity. By creating a blockchain tailored to this market, WAX generates crypto/blockchain use cases that can onboard millions of new users through apps they actively use and payment models they are already accustomed to.
Above all, The WAX design philosophy prioritizes the consumer's user experience over everything else. Features like free transactions, fiat payment integration, cloud wallets that don't require private keys, and tools to create/display NFTs without coding – all reduce the barriers to blockchain adoption for non-technical general public users. This user-centric approach sets WAX apart from many other blockchain platforms.
Additionally, WAX provides an ecosystem of services such as Explorer, ExpressTrade Marketplace, NFT Creator, etc. which allow developers to easily create user-friendly dApps and NFT projects without having to develop complex infrastructure themselves. This microservices layer can significantly drive innovation in the NFT space.
Perhaps most importantly, WAX demonstrates how blockchain can solve real business problems in areas such as digital item provenance, ownership rights, supply chain traceability, and more. Working closely with partners in gaming, esports, collectibles and fashion, WAX is introducing the value proposition of blockchain to traditional businesses and consumers.
In summary, through its industry focus, user experience innovations, developer tools, and enterprise use cases, Project WAX represents a concerted effort to drive widespread crypto adoption . Its success could pave the way for blockchain to transcend its current niche and become a transformative element for entire industries like retail and entertainment.
Potential challenges that WAX must overcome
While WAX's vision for mainstream adoption of blockchain via digital assets/NFTs is compelling, its approach presents some limitations and challenges that are worth examining.
First, by focusing specifically on digital/virtual goods and NFTs, WAX targets a relatively niche use case within the broader blockchain ecosystem. While large, the gaming, collectibles, and tokenized product markets may not meet the ubiquitous demand required for truly mass adoption. There is a risk that WAX’s sector specialization will limit its reach and impact.
Second, despite efforts to abstract complexity, user onboarding remains a major obstacle to any blockchain project. Having to create a wallet, stake tokens, interact with smart contracts, etc. still creates friction that traditional consumers may not be willing to deal with, even with WAX's user experience improvements. Making blockchain truly invisible might have limits, at least for now.
There are also technological limitations around WAX's throughput that could be tested at scale. Although fast by today's standards, 3,000 TPS throughput may not be sufficient for a platform processing millions of digital asset minting/trading requests simultaneously.
Another potential challenge concerns NFT liquidity and market fragmentation. With the proliferation of NFT platforms and lack of cross-chain operability, it remains to be seen whether the WAX market can achieve the depth and concentrated liquidity required for efficient price discovery of NFT assets. Fragmented liquidity could weaken the investment thesis.
WAX's vision is based on a thriving ecosystem of marketplaces, games and dApps built on its platform. If developers don't flock to WAX or foster competing ecosystems, it could become difficult to achieve a critical mass of digital goods. There is also the problem of integrating WAX services with external systems, APIs and codebases in gaming, retail and other industries, resulting in unforeseen technical hurdles that hinder adoption. In short, deep cross-sector collaboration is necessary for its success.
There are also regulatory uncertainties regarding the issuance, trading and taxation of NFTs in all jurisdictions. An unclear regulatory environment could hamper participation by businesses and institutions until policies catch up with technology.
Finally, one must consider the competitive threat from large tech companies that are also interested in the NFT/digital goods space, which could potentially usurp WAX's first-mover advantage through a greater share of mind and capital resources.
To address these challenges, WAX will need to find the right balance between its specialized approach and ecosystem interoperability, technology development and strategic partnerships to create a scalable and sustainable NFT economy. Continuous innovation will be essential to maintain its pioneering position.
Final Thoughts
The WAX blockchain combines the best of all technologies in the crypto blockchain world while avoiding its biggest problem: environmental impact. It is currently the 10th largest blockchain in terms of user activity, and recently signed a mega-deal with Amazon.
Its future looks promising, especially with the dedication shown by its development team to create the best possible version of the platform. (They admittedly spent more than five years refining the idea and execution strategy for the platform.) As the project matures and its ecosystem grows, it will be fascinating to watch WAX's impact on the future of digital economies based on blockchain.
Disclaimer: This article is intended for informational purposes only and should not be considered trading or investment advice. Nothing contained herein should be construed as financial, legal or tax advice. Trading or investing in cryptocurrencies carries considerable risk of financial loss. Always do your due diligence.
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