WAX (Worldwide Asset Exchange) is a decentralized system for trading both video game items and tokenized consumer products. WAX can also be used as a blockchain to run Dapps themselves.
This article will explain how WAX works and what it can be used for. We’ll go over OPSkins, Guilds, EOS Dapp duplication, vIRL, VGO, and more.
We’ll tell you everything you need to know about this new method of participating in the gaming economy.
READ: How to Buy WAX Token – Crypto Guide
Game-item trading problems
WAX was developed to solve problems in the game-item trading economy.
Most major PC game developers do not provide blockchain-backed items in their games. Instead, they require players to use an in-game mail system or face-to-face interaction between characters to facilitate a trade.
And only in-game currency can be used to purchase items in these games, not cash.
Although some players do attempt to sell items for cash, this inevitably requires trusting a third-party to adjudicate disputes.
Compounding the problem is the fact that most game developers have terms of service that expressly forbid selling in-game items for cash. This means that if one player defrauds another by refusing to pay for an item after it has already been transferred, the victim has no recourse to get restitution.
Despite these problems, many players do want to trade game items. They feel that these items belong to them and that they should be able to trade these items freely. Yet they still face the problem of how to complete a transaction safely.
Seeing this problem, the WAX team attempted to come up with a solution. Their first attempt was OPSkins. This initial project eventually led to the creation of WAX.
OPSkins is a website that facilitates the trading of in-game items. It acts as a trusted third-party between players.
If a player wants to sell a skin, weapon, piece of armor, or any other item, he can list it on OPSkins. When a buyer decides that he wants the item, he pays OPSkins the purchase price. OPSkins then contacts the seller with a trade offer from within the game.
The seller delivers the item to the OPSkins character or account in game. The OPSkins website then delivers the funds to the seller and the item to the buyer’s character. This eliminates the need for buyers and sellers to trust each other.
After developing OPSkins, the team realized that the problem they were attempting to solve would soon be eliminated by blockchain technology. So they set about creating a blockchain that would allow anyone to create an OPSkins-like system on their own.
The result was WAX.
Transfer Agents and an early version of WAX
The first version of WAX employed a special type of account called a Transfer Agent. Transfer Agents were responsible for making transfers between buyers and sellers. In order to perform the transfer, the agent would need to have an account with the particular game through which the transfer was being made.
In this early version of WAX, Guilds assigned Transfer Agents as part of their block-producing responsibility. Guilds were also judged based on the trustworthiness of the Transfer Agents they assigned.
The whitepaper for this version was released in March, 2018.
In the Summer of 2018, the WAX team came into conflict with Valve Corporation, who claimed that WAX violated the terms of service of Counterstrike: Global Offensive (CS:GO) and Steam. Valve threatened to block Transfer Agents from the Steam service.
Since this time, the WAX team appears to have shifted focus towards making it easy for users to trade blockchain-backed game items instead of centralized ones. The team believes that game developers will increasingly support trading of in-game items over time.
The current whitepaper for WAX, published in August, 2019, makes no mention of Transfer Agents. And it appears that this type of account no longer exists on the WAX platform.
How WAX Works
The current version of WAX allows users to trade game items as well as real-life tokenized products. It also functions as a smart contract platform similar to Ethereum, EOS, NEO, TRON, etc.
Here is a detailed description of how WAX works.
There are three different types of accounts on the WAX network: Users, Guilds, and Contracts. Here is a list of the basic functions of each type.
Users – Buy and sell items
Guilds – Verify transactions on the blockchain
Contracts – Automated agents that carry out code as programmed
DPoS Consensus Protocol
WAX uses a delegated Proof of Stake (DPoS) consensus protocol. Guilds are chosen by users who pledge votes to them.
This system allows for high speeds and low costs, two features that are necessary for any system that can support scalable Dapps.
Blocks are confirmed by Guilds. 99% of the blocks are confirmed by the 21 primary Guilds, while 1% of the blocks are randomly assigned to 36 standby Guilds and are confirmed by them.
If a Guild fails to produce a block assigned to it, the transactions are held until the next block is produced by a different Guild. In this way, users are only slightly inconvenienced by a slower transaction time should a Guild miss a block.
If a Guild does miss a block, its voters do not get paid for the missing block. This helps incentivize voters to only vote for Guilds that can consistently produce blocks.
Each WAX token holder has the right to delegate votes to one or more Guilds based on the number of tokens held in his wallet. To accomplish this, the token holder must use a Lynx, Sqrl, Scatter or other compatible wallet.
Some users bought a previous version of the WAX token that was held on the Ethereum network. These users were able to swap their tokens in the past for a special Genesis WAX Token. Genesis WAX tokens are staked by default.
Users who vote earn WAX Staking Rewards from the platform’s inflation. The developer believes this helps to combat the voter apathy found on other DPoS networks such as EOS.
WAX Worker Proposal System (in development)
In a future patch, the WAX blockchain will include a system for rewarding workers that improve the platform. A portion of the platform’s inflation will be used for these rewards.
Inflation and disinflation
Holders of Genesis WAX tokens can unstake these tokens at any time. If a holder does this, his Genesis tokens will become ordinary WAX protocol tokens.
More importantly, any rewards that would have been earned by the Genesis token holder will become burned if he unstakes them. This will have a disinflationary effect on the token supply. In other words, it will cause the token supply to grow at a slower rate than otherwise.
The developer believes this effect could lower token inflation by as much as 50%.
The WAX blockchain also produces new tokens to reward participants. And these new tokens amount to a 5% inflation rate assuming no genesis holders unstake.
Out of this 5%, 2% of the rewards go to voters, 2% to Guilds, and 1% to the Worker Proposal System.
WAX Microservice Layer
To help developers create the products users will love, the WAX platform includes a Microservices Layer that consists of a suite of tools to make coding Dapps easier. Here is a list of them.
WAX All-access – A single sign-on service that prevents users from having to remember multiple passwords
WAX Account – An interface that works like a wallet, but without needing to store private keys
WAX Marketplace – Allows developers to create a storefront for items using an API
WAX Explorer – Similar to a block explorer, except that it has a more appealing interface and is more user-friendly
WAX ExpressTrade – Allows users to trade NFTs simply and easily
WAX NFT Creator – Lets developers create game items or other NFTs compatible with the WAX blockchain
Duplicating an EOS Dapp on WAX
WAX was inspired by EOS. And EOS Dapps can be duplicated onto WAX through a simple process.
For a developer to deploy his EOS Dapp onto WAX, he must take the following steps:
- Make a WAX blockchain account and link a Scatter wallet
- Make sure there is enough WAX in the account to handle resources needed by the Dapp
- Install the Cleos developer tool
- Make an account for the Dapp’s smart contract
- Deploy the contract
Current popular Dapps on WAX
There are two dapps on WAX currently that have high operational volume: vIRL and VGO
vIRL is a website and Dapp that allows users to buy “boxes” of real items digitally. The real items include such things as iPhones, Luis Vutton apparel, Yeezy sneakers, and other valuable objects.
For each object, a blockchain token is created to represent it. These tokens are then sent to a smart contract and organized randomly into “boxes.”
When a user buys a box, he can “open” it with the click of a mouse, revealing the token within. Once he owns the token, he can redeem it himself or sell the token to someone who wants the item.
VGO is a website and Dapp that offers blockchain-backed skins to be used in future games.
The skins are randomly generated from a smart contract. To obtain a skin, the user must buy a vKey and use it open a vCase. Once the vCase is opened and the user sees which skins he owns, he can sell them or keep them for future use.
The Forge Arena has recently announced that it will allow VGO skins to be used within its game.
Other Dapps on WAX
Although the Dapps listed in the above section provide most of the transaction volume for the WAX blockchain, there are many smaller Dapps that run on it as well. Here is a list of some of them.
Prospectors – A game about gold-mining
BetPink – A decentralized gambling Dapp run by one of the WAX Guilds
DCart – A game item trading hub
Alchemy Expert – A simple crafting game that uses “elements” as resources
WAX Strategy – An RTS on the WAX blockchain
WAX Tetris – The name says it all
We’ve explained how WAX works and what it can be used for. We’ve gone over the history of WAX, including its origin in OPSkins. And we’ve explained Guilds, Transfer Agents, Voting, and more.
It’s too early to tell whether WAX will eventually take over the market for NFT trading. But what it has done so far is certainly impressive.
We’ll be watching this blockchain as development on it continues, and we’ll update this page if anything new and significant happens to it.
What do you think of the idea of a blockchain made especially for game item trading? Let us know in the comments below!
WAX is building huge momentum lately. This is definitely a company that will take over the NFT market.
Yes, and Nifty Gateway was just acquired by Gemini. The NFT space might see a nice boost in 2020.
Great article, but your coverage of the accounts is unfortunately outdated and has been for some time.
You might want to check out the current whitepaper iteration:
Kaefergeneral, thanks for bringing this to my attention. I’ve made some edits to the article to reflect the new information you provided.