The WAX Protocol is a DPoS blockchain designed to scale in conjunction with a microservice layer that provides specialized infrastructure for building digital goods marketplaces. The knowledge required to construct interconnected and highly sophisticated marketplace services comes from the team’s 20+ years’ experience building digital goods businesses, including the hugely successful OPSkins.com. This document describes the WAX Protocol and how it fits within the WAX Platform. The WAX Platform is the combination of both the WAX Protocol and a microservice layer.
With the advent of distributed ledger technology and blockchain projects in the past decade, many projects have built solutions in search of a market (the digital goods market) and customers. The Worldwide Asset eXchange’s approach, however, is the opposite. We started our endeavors with a market, we understood deeply, as operators of a successful business and millions of registered customers. We had a long list of challenges that needed to be solved to grow the market for digital goods trading globally. We waited for several years to begin building WAX until the blockchain was sufficiently mature enough to handle the many requirements for success. The most fundamental requirement was that it could handle the transactions per second necessary for our preexisting consumer demand, with room for significant growth. We designed WAX to solve a specific set of problems in the digital goods market that already has millions of consumers wanting to use it.
The market for digital goods is large and growing fast. What many don't realize is that the digital goods market includes both virtual items like video games and tokenized consumer products. Video games are a $140 billion market, and tokenized consumer products are a $1.8 trillion market. The combined market, nearly $2 trillion, is the market that WAX addresses. In the 12 months of the WAX Protocol's testnet operation with its two largest dApps, VGO and vIRL, the combined trading volume exceeded $150 million.
The transition from a centralized to a decentralized blockchain model for WAX was not without challenges. June 2018 was an important moment for WAX because we announced the launch of WAX ExpressTrade. It's a product free to use by anyone for the trading of digital goods and a prototype of the WAX Platform microservice layer. WAX ExpressTrade competed with Steam, the community marketplace operated by Valve (the game publisher for Counter-Strike: Global Offensive a.k.a. CS:GO). The problem was that CS:GO was the largest source of our virtual items at the time. Since the game publisher balked at our product announcement and threatened to ban our trading bots, we had to choose between launching into our blockchain future with that product and be banned by Valve, or hold back and stay beholden to Valve’s platform.
We made our choice and here we are today doing more volume than ever without the fear of Valve’s policies that at times appeared arbitrary to us. Going 100% independent was a tough decision for us, and yet an important one to separate WAX from the centralized control systems that dominated the skins market. Games like Fortnite, CS:GO, and many others have centrally controlled skins that either prevent trading or restrict it severely. However, we see this trend changing (more on that later).
As a side note, the vIRL dApp and other dApps like it can make any tradeable item on Steam also tradeable on WAX. In essence, WAX is the technology wrapper that encompasses all other virtual items that exist. Interoperability by design makes WAX very versatile.
