What is WAX?
Straight from its website, WAX is a “decentralized platform that enables anyone to operate a virtual marketplace with zero investment in security, infrastructure, or payment processing”. It is developed by OPSkins, one of the biggest marketplaces for online video game assets. The general idea is that video game developers can use WAX as a marketplace will low barrier to entry to enable their users to trade virtual assets without trusting a middle man or paying excessive middle man fees.
What is the problem WAX is trying to solve?
Traditional virtual asset marketplaces like the Steam Marketplace charge high fees to use their marketplace. Fees are typically 5-15% with a $.01 minimum. Additionally, items sold on the Steam marketplace are sold for dollar credits in the Steam marketplace, but can not be redeemed for real dollars.
High fees have led users to go to black markets that are not backed by a trustworthy middleman. Those black markets have open doors to excessive fraud in which users send items to other users expecting to get an item in return, but the other player ends up running away with the item without giving anything back.
What is WAX’s solution?
Through smart contracts, users are able to trade virtual goods without trusting a middle man and without charging unnecessarily high fees.
What is the WAX token used for?
WAX tokens are used to list, sell, transact, settle, create and service contracts, propose, pledge, and vote for WAX guilds (delegated WAX nodes).
Who is the team?
The WAX team is their strongest advantage. WAX was created by OPSkins which is one of the biggest video games asset marketplaces in the world. BlockWolf could not find publicly available volume numbers but we project that Steam has the most digital asset sales and OPSkins has the second most. With their existing marketplace, WAX is in a great place to transition their existing marketplace to the blockchain.
Blockchain is a great match for the gaming industry. In the status quo, trading digital assets is plagued with high fees and fraudulent traders. Users have the option to use a trust worthy counterparty and pay a high fee or avoid fees by potentially getting ripped off by a shady trader. Blockchain and smart contracts enable users to trade assets without worrying about trust or fees.
It sounds like WAX is a great idea at first but WAX and OPSkins have struggled to maintain marketplaces for the biggest games on the market like League of Legends, DOTA 2, Counter-Strike, Fortnite, Overwatch, etc.
WAX has an opportunity to help out smaller games and their developers but the major players like the ones just mentioned will not want to forfeit their control and their high fees until a major paradigm shift occurs.
As of June 21st ,Valve (the creator of Counter-Strike), disabled OPSkins’ trading accounts because of a violation with their terms and services. The shutdown indicates two things. 1) Major game developers do not want to forgo the massive fees they are receiving on digital asset trading and 2) OPSkins has no power over the major gaming players.
WAX sounds great in theory but we cannot expect future big video game developers to give up the control over their digital assets and their massive fees.
Some members of the WAX community said that more information about WAX will be released in Q4 of 2018. They suggested that the WAX blockchain will be able to connect with Steam and bypass some of the problems that they are currently undergoing but even if they find a solution, Steam and other gaming platforms may be able to found a way to counter their solution.