WAX — Update I


TL;DR. Ecology:5 (3). Technology:3 (3). Decentralization:2 (2). Valuation:4 (3). Rating:4/10 (3/10)

Six months have passed since the BD Ratings review of WAX. Here is how that prediction has turned out so far.

2018-06-04 USD 0.195183, Satoshis 2 569.

2018-12-04: USD 0.064304, Satoshis 1 619.

Let's explore what the project has been up to the last 6 months. On the 5th of June, just a day after rating publication, WAX announced that tokens from CryptoWars - an Ethereum-based strategy game - were to be tradable on OPSkins with WAX tokens.

A couple of days later and more importantly, Valve notified OPSkins that it was to disable OPSkins Steam accounts associated with trade on Steam. This came as a great blow to OPSkins as that exchange was mainly used to trade Steam based items. Indirectly, it was a blow to WAX as well since the plan had always been to facilitate the OPSkins trading with WAX tokens. The main reason Valve took this decision seems to have been to drive trading volume to its own high-commission marketplace. OPSkins did not close down however and instead started pursuing full permissionless digital item trading as a future standard, with WAX as the critical facilitating protocol. BD Ratings' understanding of this long term goal is that of more or less permissionless trading of non-fungible tokens that can be used on not one but multiple platforms. This means that for example a provably scarce weapon skin could be 100% owned by a gamer, who could also apply that same skin to other games.

Despite the setback, WAX continued to search for businesses and in the BCT thread, it was revealed that they had entered a strategic partnership with Virtual Reality platform Terra Virtua. This partnership included the feature of being able to view, in 2D or 3D, non-fungible tokens bought within the WAX ecosystem.

On 29th of October 2018, WAX released their block explorer as well as beta blockchain. With 7200 blocks per hour on average, it apparently processed more than 22 million transaction in just a week, resulting in an average of more than 3 million per day. These transactions represented transfers of VGO skin items - most of which does not seem to be usable in any game so far. In the release article, WAX confirmed a delay of mainnet to 2019 mainly due to the blockchain governance aspects. As the code base was taken from EOS, the governance problems of that blockchain made WAX developers realize this was an issue they had to solve before the full launch.

The old WAX ERC20 token will at time of mainnet launch be swapped for a new version while still retaining utility for the platform as a whole. This means WAX ends up with a two-token system. Full details of how exactly the old and new WAX token will function has not yet been released but when it has, BD Ratings will evaluate it.


The Terra Virtua partnership is actually very fitting, as the facilitation of smooth peer to peer trading of unique content in the form of tokens can benefit Terra Virtua, while the added user base of Terra Virtua can benefit WAX. It is apparent that WAX tries to capture the non-fungible token trading market. And it makes sense. Non-fungible tokens on a decentralized blockchain is a very promising concept. Today's collectibles are stored on centralized databases, resulting in doubt for the element of long term scarcity. A public blockchain with smart contracts can help solve this by proving both ownership and scarcity.

Another example of good addition to the WAX ecology is the VGO dapp that launched on the alpha network. A massive number of transactions seems to have occurred, proving the network could facilitate business needs. An aggregation of blockchain operations have been measured and the results are impressing. More on-chain activity can be seen on the official block explorer.

When heading over to the subreddit, it seems the community is inactive while WAX team members are busy posting updates. It is obvious that WAX interacts not mainly with cryptocurrency enthusiasts, but with the broader gamer community. A YouTube video about VGO skins with over 700 000 views is evidence of this.

Grade: 5

Reasons: Good usecase. High (beta) blockchain activity. OPSkins proven to deliver market utility.


In a blog post about VGO's choice of blockchain, WAX argues that Ethereum is and never was ready for successful businesses to build on top of it. And in a sense they are right. The transaction throughput needed for VGO's digital item marketplace was evidently way higher than what the Ethereum base protocol could manage. However, BD Ratings had hoped that the authors would have brought up the efficiency/decentralization trade-off. As VGO moved to the WAX alpha protocol based on EOS, the congestion issues disappeared. But obviously this efficiency must be seen in relation to the more centralized protocol.

With the above said, WAX will be able to process a very high number of transactions per second based on recent tests. If the team can manage to implement a governance system with the correct long-term incentives in place, and keep that system running, then the Technology rating will increase. Another obvious thing the team will have to do is to publish the code base that at the moment seems to be closed source.

Worth adding as well is the fact that WAX defines itself as an 'item-centric' project where for example the use of a blockchain is secondary. This is reflected in their relatively strong Ecology capabilities.

Grade: 3

Reasons: Closed source. Mainnet not fully released. EOS governance issues to solve. High transaction throughput.


In the first review, BD Ratings was concerned about the EOS code base and what was deemed a vulnurability that resulted in power concentrating to a few actors. It turned out this fear was justified. The EOS code base proved to be vulnerable to centralization through powerful block producers colluding with each other for profit. WAX has acknowledged this and is apparently working on better governance, which is also the main reason of mainnet launch delay.

As mentioned already, the new code base is closed source. When/if WAX opens it up, BD Ratings can start to look into the pace of development and how many developers are contributing.

Grade: 2

Reasons: Still concentrated token allocation. Evidence of EOS code governance vulnurability. Closed source code base.


WAX has like so many other tokens fallen in price under 2018. At time of writing, the project is worth around USD 120M if the full supply is counted. This is a high valuation considering mainly the centralization of the project, but worth noting is also the potential for economic activity on the chain.

Grade: 4

Reasons: OK valuation considering possible on-chain activity. Centralized project. Mainnet not fully launched.