WAX (WAX)

Worldwide Asset eXchange (WAX) is a Layer-1 (L1) network geared toward gaming and NFT use cases.

WAX

Total supply	1,850,000,000 WAX
Website	https://wax.io/

Basics

• Based in:
• Started in: 2017
• Mainnet: 6-2019
• from CMC:

"WAX (WAX) is a decentralized platform that enables anyone to operate a virtual marketplace with zero investment in security, infrastructure, or payment processing. Developed by the founders of OPSkins, the world’s leading marketplace for online video game assets, WAX is designed to serve the 400+ million online players who already collect, buy and sell in-game items."

Audits & Exploits

• Bug bounty program can be found [insert here]. None according to Blockchain Security DB (29-6-2020), which does show 1 audit (12-2017).

Token

ICO

• From a commissioned Messari report (3-4-2023):

WAX launched in June 2019 following an ICO that raised around $60 million at the end of 2017.

Inflation

• According to a Messari report (Q3-2023) it has 5% inflation at that time.

Other Details

• From a commissioned Messari report (3-4-2023):

"WAX mints its WAX token at a 5% inflation rate which it distributes to validators (2%), delegators (2%), and its treasury (1%). The burn mechanism has not significantly impacted inflation, which has stayed around 4.9%. Since all validator rewards come from inflation and the burn mechanism does not significantly lower inflation, WAX’s real staking yield (nominal staking yield adjusted for inflation) is negative (-0.27%)."

Tech

• Whitepaper or docs can be found [insert here].
• Code can be viewed [insert here].
• From a commissioned Messari report (3-4-2023):

"The network is built using the open-source Antelope framework (formerly EOSIO) which features Delegated Proof-of-Stake consensus."

• Virtual Machine:
• Development language used: C++

Transaction Details

• Capacity (TPS):
• Latency:

How it works

• From a commissioned Messari report (3-4-2023):

"On top of [its] core Antelope stack, WAX Labs built other services including a cloud-based wallet, an NFT creator and marketplace, an on-chain random number generator, and a block explorer. These services were built to provide a more familiar Web2 experience on top of the core blockchain protocol."

Fees

• To create a wallet, users have to pay 5 WAX (3-4-2023).

Staking

• From a commissioned Messari report (3-4-2023):

"In WAX’s Delegated Proof-of-Stake (DPoS) model, a tokenholder does not delegate tokens toward one validator; instead, they stake their tokens and then can vote for up to 30 validators. Each validator would then receive that tokenholder’s full amount as voting power. For example, if a tokenholder has 1 million voting power and votes for 30 validators, each validator would have 1 million voting power. Due to this system, it is impossible to precisely measure how much stake is delegated to all validators versus the top 21 (participating validators).

In order to take over the network through a two-thirds attack, a malicious actor would need to control 15 validators. Because of the abovementioned voting power system, a malicious actor would need enough stake to control the seventh highest validator by voting power. At the moment, this threshold is 1.29 billion WAX tokens ($92 million)."

Validator Stats

• From a commissioned Messari report (3-4-2023):

"There are currently 65 validators with WAX voting power; however, only the top 21 with the most voting power can participate in consensus in a given round. Almost 1.6 billion WAX ($114 million) is staked, representing 68% of the total supply. Not all of these staked tokens are necessarily delegated to validators, though, they could just be staked in WAX’s resource model and not voting for validators."

Interoperability

• From a commissioned Messari report (3-7-2023):

"WAX integrated Antelope IBC in May, securely connecting WAX with EOS, UX Network, and Telos. IBC activity has been low so far, but a planned consensus upgrade to add near-instant finality by the end of the year will further unlock use cases of the cross-chain protocol."

• From a commissioned Messari report (3-4-2023):

"Driven by the EOS Network Foundation, the Antelope Coalition has been developing an EVM solution. Currently, Antelope chains feature C++ smart contract programmability. The EVM solution will be deployed as a set of smart contracts within each chain, similar to Aurora on NEAR. Once implemented, it will allow developers to build protocols on WAX in Solidity or fork existing EVM-compatible projects."

Roadmap

• Can be found [Insert link here].
• From a commissioned Messari report (3-4-2023):

"The WAX team is planning an overhaul of WAX tokenomics and staking mechanisms in Q2 2023. The number of rewards to each network participant (validators, delegators, and treasury) will remain roughly the same. However, if the fees collected by the protocol cover the rewards, no additional WAX will be minted, and all leftover fees will be burned. If there’s not enough activity to cover the rewards, inflationary WAX will be minted to cover the difference. In the proposed system, inflation should not exceed 4%.

Along with the rest of the Antelope Coalition (EOS, Telos, and UX Network), WAX plans to implement a consensus mechanism upgrade to improve network performance by the end of the year. The Coalition is funding 0rigin, the core development team of UX Network, to develop the new mechanism. The mechanism will be a modified variant of HotStuff. The upgrade will expand Antelope validator sets beyond 21, improving decentralization. It will also bring near-instant finality (compared to the current three-minute transaction process), improving user experience and developer capabilities."

Revenue

• From a commissioned Messari report (3-7-2023):

"WAX’s revenue (all fees collected by the protocol) dipped this quarter to yearly lows, both when denominated in USD and WAX. Revenue (USD) decreased 50% QoQ to $105,000 and revenue ($WAX) decreased 42% QoQ to 1.7 million."

• From a commissioned Messari report (3-4-2023):

"WAX’s revenue (all fees collected by the protocol) rebounded in the quarter, although not as much as market cap. WAX has a unique resource model where WAX tokens (“WAX” on the WAX blockchain, “WAXP” on the Ethereum blockchain) can often be recouped by the user if they no longer require bandwidth or state storage resources. Thus, WAX does not collect revenue through gas fees. Instead, WAX revenue comes from a 2% tax on NFT secondary sales backed by a “gentlemen’s agreement” with NFT marketplaces. Therefore, the increase in WAX revenue comes from greater NFT activity this quarter.

WAX burns 20% of its revenue and bridges the remaining 80% to Ethereum to distribute to liquidity providers. WAX mints its WAX token at a 5% inflation rate which it distributes to validators (2%), delegators (2%), and its treasury (1%). The burn mechanism has not significantly impacted inflation, which has stayed around 4.9%. Since all validator rewards come from inflation and the burn mechanism does not significantly lower inflation, WAX’s real staking yield (nominal staking yield adjusted for inflation) is negative (-0.27%)."

Usage

• From a commissioned Messari report (3-4-2023):

"Transactions and daily active address activity have remained relatively constant throughout the past year. Average daily transactions were up 4.8% QoQ to 20 million, while average daily active addresses were down 0.1% QoQ to 338,000. Of the roughly 1.5 million total active addresses in Q1’23, just over half were active for 9 days or less. Around 6.5% were active for over 80 days throughout the quarter, with a spike of over 3% of addresses that were active every day. New addresses and total active addresses decreased YoY more significantly than average daily active addresses. In January 2022, the WAX team added a 5 WAX creation fee for new Cloud Wallet accounts, partially to deter the creation of bots and spam accounts. The new fee helps explain the 81% year-over-year decline in quarterly new addresses.

Play-to-Earn (P2E) game Alien Worlds accounts for a majority share of daily active address activity among all WAX contracts. Alien Worlds is a high-click outer space mining game, which also recently launched a PVP battle mode.

The next most popular set of contracts by active addresses is Farmers World, another high-click P2E game. However, over a year ago the Farmers World team sold the entire treasury (worth around $50 million at the time) and halted all development and communication. Despite this, Farmers World continues to average around 60,000 daily active addresses. Farmers World and Alien Worlds have a large, almost equal share of power addresses. Both averaged around 41,000 daily active power addresses. High-click Play-to-Earn games like Farmers World and Alien Worlds are prime for bot usage because they incentivize repeatedly clicking buttons. As such, the nature of these games could be accounting for the large amount of power addresses for these dapps. In March, the WAX team announced an AI/ML tool called TRUST by the NFT marketplace Chain Champs. Once it’s released, TRUST will analyze an address’s transaction history and score how likely it is to be a bot.

The most popular contract for newly created addresses is the WAX System. Over the quarter, the WAX System had a 49% share of newly created address interactions compared to a 6% share of all address interactions. This discrepancy indicates that many addresses are joining the network just to stake their WAX rather than for a specific ecosystem use case."

• From The Defiant (13-11-2020): "Outside of Ethereum, WAX has been making progress utilizing the technology [of NFTs]". It also stated that active wallets got as high as Ethereum during 2020.

Projects that use or built on it

• As of 20202 Q1, it has 134 Dapps, 23 of which are active, 8 were new, and about 10.84K active users.

Pros and Cons

Cons

• Its revenue is built on a gentlemen's agreement, not on hardcoded rules (3-4-2023).

Team, investors, Partner

Team

• Full team can be found [here].
• WAX was created by the founders of OPSkins™ (16-1-2019)
• Exposition Park Holdings SEZC, the company overseeing the Worldwide Asset eXchange

Partners

• Animoca Brands announced a partnership with Exposition Park Holdings SEZC(16-1-2019) "Animoca Brands will introduce user-generated items for its game The Sandbox on to the WAX platform. Under the Agreement, WAX and Animoca Brands are initiating a mutual exchange of value totaling US$250,000, whereby Animoca Brands will exchange common shares of its stock for the equivalent value in WAX tokens. The swapped shares and tokens will be subject to a 24-month escrow period." As of 4-2023, there is no sign of WAX and The Sandbox having any relationship.