WAX is a utility token that’s designed to make digital item trading easier and less expensive for both marketplaces and customers, particularly for small and cross-border transactions. There are five main reasons that WAX is superior to other tokens in the space:
- Who and what is behind WAX
- Adopter incentives
- The advantages of WAX to users
- Managed volatility
- How WAX is distributed
There’s an expert team and established company behind WAX
There is no better team to build WAX, period. The WAX team is the same team behind OPSkins Marketplace, which is the #1 digital marketplace in the world. WAX will be the third global marketplace built by the OPSkins team, which is particularly impressive when you consider that their first two global marketplaces became #1 in their respective categories.
Why is OPSkins key to the WAX platform’s success? Because OPSkins, a site that sells 2 million items per week, will be WAX’s first customer. OPSkins will fully support WAX, and it will be integrated at every level within OPSkins.
And in case you’re wondering if OPSkins customers will be inclined to use WAX, know that OPSkins customers are already primed for using cryptocurrency. OPSkins has been accepting bitcoin for more than two years, and after they built their own bitcoin payment processing platform, OPSkins became one of the top five largest e-commerce sites globally for accepting bitcoin. Their millions of customers already like and use cryptocurrency, and will naturally adopt WAX since it will serve as a lower cost and easier settlement method than what they’re accustomed to using on OPSkins.
Sites have an incentive to adopt WAX
The functionality of the WAX Platform and Token is designed to generate money via fees for sites that adopt it.
The entire WAX system is meant to be viral, where listing sites and sale sites will want to list digital assets. Why? Because they’ll make money. The selling site, listing site, and escrow agents all get a portion of the sales fees for every item that’s transacted on the WAX Platform between those sites. Any site will be able to create their own white label site even with no programming experience by using WAX’s open-source templates.
But what about OPSkins competitors — will they use WAX even though it’s developed by OPSkins? Yes, because not only do they have access to list every single item on their site that’s will be listed for sale on OPSkins, but they can also list any and all the items from every other site that uses the WAX Platform. In short — any site that adopts WAX can list any item from the inventory of what’s available on the WAX Platform’s blockchain. The same item can be listed on an endless number of websites so long as they adopt WAX.
WAX also provides a simple exchange widget for websites to use, so that if a user decides to purchase a digital item that they want from a site that uses the WAX Platform, they can simply click a “buy now” button in the WAX widget on the site. An example site for placing such a widget would be on Twitch.tv, which broadcasts live streams from video game players. If a gamer was watching their favorite streamer playing in a CS:GO match with an interesting skin, the gamer would click on the WAX widget displayed on Twitch.tv to purchase that skin from the streamer. The streamer would make additional revenue from selling their skins, Twitch.tv would get a cut of the transaction fee for hosting the widget, and the gamer would be able to purchase their skin without ever having to interrupt their viewing experience of the match.
Not only can anyone, even with limited technical knowledge, create a listing or selling site for existing digital items, but sites transacting physical items can also be supported by adopted WAX. Cross-chain crypto trades can be supported as well.
WAX will provide advantages to virtual item traders
WAX has real-world advantages to people who buy and sell digital, virtual, or physical items with WAX.
Since WAX can be used on any site that supports the buying and selling of digital, virtual, or physical items, then users can trade anything that’s available on the WAX Platform for anything else. For example, if a World of Warcraft player sells their WoW gold for WAX Tokens, they can then visit OPSkins.com and purchase a CS:GO knife skin with those WAX Tokens. Even though the virtual items are for different games, made by different publishers, and hosted on different platforms, they can be traded using the same token — WAX or a WAX pegged asset contract.
The simple widget makes it easier for buyers to purchase items with WAX. The buyer will select an item and provide payment within the WAX widget, without needing to understand the complexities behind WAX.
The first time a buyer or seller interacts with the WAX Platform, they’ll be taken through an onboarding process that allocates a WAX Wallet and allows them to either fund the immediate purchase or list their item for sale, all without forcing them to understand WAX, the WAX Platform, or WAX Tokens.
The ability to trade any digital or digitized item for any other on the same platform with the same process is an advantage over other competing business models.
WAX pegged asset contracts manage volatility
Items sold for WAX Tokens will be nearly immune to price volatility through the use of WAX pegged asset contracts.
Price fluctuations of any amount will exist whenever an item that’s worth a fixed amount is transacted with a market-driven currency. This potential volatility, regardless of how strong, could lead to items being purchased for more or less money than the seller initially intended, reducing the efficacy of using the market-driven currency. WAX solves that through the use of pegged asset contracts.
Say a seller wants to list item Z for $100 USD, but the value of WAX during that week is fluctuating 25% in either direction. Rather than pricing item Z in WAX Tokens and the seller risking one of three outcomes — receive $75 USD if the price goes down, take the chance that the item will fetch $125 USD if WAX is trending upwards at the time of sale, or not find a buyer in a timely manner since the price increased 25% over it’s actual value — the seller can list item Z for a WAX pegged asset contract with a value of $100 USD. By doing so, a buyer purchases item Z for the price of its WAX pegged asset contract worth $100 USD and receives item Z in their inventory, while the seller receives $100 USD in WAX Tokens (minus fees) even if the value of WAX at the time of sale was 10% higher than at the time of listing.
WAX pegged asset contracts are temporary smart-contracts that exist only during the life of a particular transaction, so using the above example it would be the time from when item Z is listed for sale and when it’s purchased.
The concept of WAX pegged asset contracts is similar to how CS:GO gamers currently price the value of their items in relation to the price of CS:GO keys. A WAX pegged asset contract could be USD, EUR, BTC, ETH, CS:GO Keys, or many other things.
How WAX is distributed
At any given time, there’s a limited number of WAX Tokens in actual use. In order for the Platform to function, Tokens are locked up for a variety of reasons.
The circulating supply of Tokens is limited for two reasons:
A: Guilds, Transfer Agents, and Contracts
WAX Tokens are used to list, sell, transact, settle, create and service contracts, propose, pledge and vote for WAX Guilds.
Guilds are the confirming nodes of the WAX Platform. WAX Tokens must be pledged to Guilds, and these Tokens are locked up while they are pledged.This limits the circulating supply of WAX Tokens because users will pledge, and therefore lock up, their Tokens in order to support Guilds.
Transfer Agents are responsible for enacting in-game trades of virtual items purchased. Transfer Agents must put up a bond of WAX Tokens equal to 4x the amount of assigned Settlement Execution Contracts. The WAX Tokens put up for these bonds are locked up and so cannot be traded. In order to increase the volume of Settlement Execution Contracts that a Transfer Agent conducts, the Transfer Agent must increase the amount of the bond to maintain the required 4x, and so must acquire more WAX Tokens to do so. As a Transfer Agent’s volume grows, they must lock up more tokens as to not limit the amount of contracts they can execute. This too limits the circulating supply of WAX Tokens.
While the Settlement Execution Contracts is pending execution, the WAX Tokens designated for the transaction are locked up. The length of this lock-up is contingent on the amount of time that it takes for the Transfer Agent to execute the contract.
B: No additional Tokens will be added
Not only is the circulating supply limited by locked-up Tokens from Guilds, Transfer Agents, and contracts, but no new WAX Tokens get added to the network as there is no mining with WAX. Only tokens that exist in the network are used.
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