In addition to logistics, charity, and medicine, the gaming industry is also well poised to utilise the benefits of blockchain technology.
The world of online gaming is set to be disrupted as industry pioneers use the blockchain in order to solve current problems.
WAX is offering a decentralized peer to peer trading protocol for online video game assets, and the WAX team are hoping to serve over 400 million online players who buy, sell, and collect unique in-game items.
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What is WAX?
WAX (Worldwide Asset Exchange) is a decentralized platform that enables anyone to create and operate their own virtual marketplace. Without needing to invest in security or payment processing protocols, users can run a fully functioning virtual marketplace for digital assets.
WAX has been developed by the founders of OPSkins, the leading marketplace for online video game assets, and the platform also allows both current and future marketplaces to interact via the use of the native WAX token.
The project currently has offices in both Canada and the USA and the WAX team is fronted by the top brass at OPSkins.
WAX Team Members
CEO William Quigley is also the CEO at OPSkins, while lead designer John Brechisci Jr is both an OPSkins founder and CTO. Jonathan Yantis holds the COO position at both companies, whilst OPSkins CIO Malcom CasSelle also acts as the President of WAX.
What Problem Does WAX Solve?
The practice of trading virtual goods or “skins” that can customize in game appearances is well established in the online gaming community.
However, up until recently, there was no single marketplace that provided easy access to sellers of various skins, and exchanging the virtual goods often involved visiting online forums with poor reputations, or hoping for chance encounters.
Trades also required a high degree of trust as exchanges often took place on different platforms and fees could vary wildly depending on the seller.
WAX President Malcom CasSelle recently elaborated:
The vast majority of gamers who buy and sell virtual assets today are likely to have their items stolen or pay exorbitant fees through cross-border transactions, unless they go to a centralized trading platform. The ideal solution to this problem is a global virtual asset repository, accessible to anyone, which provides a complete catalog of all items available for sale in real time
Traditionally, in order to trade in game assets it was necessary to carry out an exchange where one party sent over a payment in the hope of receiving their item.
There remains a brief gap in time where either party could get scammed for their money or item. WAX streamlines the procedure by providing a secure platform that guarantees the delivery via a decentralized, trustless system.
Overview of WAX
Steam provide an alternative to this system in 2012 and the Steam marketplace has proved to be popular with gamers, however, Steam operates a centralized platform that isn’t integrated with alternative systems and any funds earned on the platform are only valid on the Steam market.
How Viable is the Project?
WAX is run by the founders of OPSkins, which is the leading marketplace in the world of online video game assets and despite starting less than three years ago, the company already boasts transactions of around two million per week and 100 million per year.
OPSkins also has millions of current users while the highest transacted item on the platform was worth $35,000. As a result, WAX is legitimately targeting a market of over 400 million gamers that is worth approximately $50 billion in virtual items worldwide.
The potential for WAX is huge and the marketplace can also handle more than just virtual items. Users can tokenize physical items and can form a guild to accept rare collectibles such as clothes and watches, and then issue tokens that can be redeemed by their owner. The owner can then trade the tokens for other items on the WAX platform.
The platform also makes use of transfer agents that are entrusted to facilitate the transfer of virtual goods between the buyer and seller and help administer the entire process. These agents take care of verifying and settling transactions in addition to collecting and holding the asset, before delivering it to the seller.
The entire process allows for marketplace that does away with the need for items to be transported, or physically sold at conventions and exhibitions. The platform is available around the globe and guilds can be created by anyone, which allows all kinds of assets traded on WAX.
As a result, WAX tokens are utility tokens that are used for all types of virtual goods and also help facilitate low cost, secure, and trustless trades on the WAX platform.
President Malcom CasSelle views the project as being similar to the current giants of ecommerce stating
WAX will enable a new generation of virtual asset traders, in a similar way that modern marketplaces enabled entrepreneurs to become power sellers online, ride share drivers or hosts for travelers (Alibaba, Amazon, Uber, and Airbnb)
Is WAX Worth Investing In?
Despite the many positives surrounding WAX, there are still some inherent risks associated with the project. For example, the utility of the project is limited its current user base, and anyone outside of the gaming community will not be drawn to use the token.
WAX also faces competition from the likes of Dmarket and Enjin and while Dmarket also aims to facilitate the trading of virtual goods, Enjin acts as a platform that helps users to create and manage virtual goods and focuses on game publishers.
However, WAX does not help publishers to create items and focuses on the secondary marketplace that allows goods to be traded online.
There is also competition in the form of centralized projects such as Steam or IGXE in China. The Steam marketplace has proved to be popular with gamers and funds earned in the Steam market are restricted to that platform.
IGXE has millions of gamers involved in the trading of in game virtual assets and Chinese gamers often want to use Alipay for their transactions. In addition, China operates a strict foreign currency control policy and OPSkins currently doesn’t have the necessary licenses to accept payments in China which closes off the Chinese market.
However, there is the possibility that local Chinese marketplaces like IGXE can set up their own markets using WAX’s system of transfer agents and payment processors
Prior to the ICO, the WAX token attracted a large amount of demand, with Pantera Capital, HyperChain Capital, and Fenbushi Capital all expressing interest in the project. WAX is also supported by Ethereum co-founder Anthony Di Iorio and respected game developers Dave Anthony and Brian Fargo, in addition to industry bigwig Mike Novogratz.
On top of this support, the WAX team has also announced a partnership with payment company Xsolla. The payment giant is a global distributor and publisher of video games, and retains companies such as Steam, Twitch, and Ubisoft as clients. Xsolla has confirmed that it will accept the WAX token as a form of payment.
WAX Project Roadmap
As a result of the level of optimism surrounding the project the WAX token performed extremely well once the ICO was completed at the end of last year.
Each WAX token was priced at $0.32 during the ICO and this rocked to a high of over $4.80 at the end of December. After swiftly falling back, the token has dwindled and has been trading at around its ICO price for the last month or so.
WAX has been unable to escape the downturn that has hit the entire market and the roadmap outlined in their whitepaper shows that the functional use of the WAX tokens will not occur until Q4 of 2018.
The team won’t actually be launching their product until Q4 of 2018, and this long wait has helped to kill much of the hype and momentum that the project previously gained.
The WAX token is currently trading below ICO price at around $0.21 and retains a market cap of around $104m; this represents a good opportunity for anyone looking for a longer hold.
Despite the poor performance, it’s worth remembering that WAX will leverage the existing OPSkins user base and once the launch has taken place we should see the rapid onboarding of users.
The overall future for WAX looks promising, though it may take until the end of the year for the token to appreciate significantly in value.
Images via wax.io