WAVES PROTOCOL: A Beginner’s Intro to Waves, Why it’s Different & How to Lease your Waves to Earn.
- By JOSH ERHIGA
Hello Africans, it’s a privilege to come your way. Whenever I write within the blockchain space, it’s because a lot of my African brothers are in the dark regarding the subject of blockchain and educating ourselves is the way out.
I also try to be very plain in my writings so that you can understand ambiguous terms in lay words. I believe blockchain is technology for the people & Waves is Blockchain for the people.
This article is solely dedicated to WAVES BLOCKCHAIN, what makes it different and how to earn passively on the network. I will not go into history but I will highlight some common terms plainly.
Off-course, Blockchain is a technology as we know it, powered by cryptography. And crypto-currencies are just a huge niche on this technology.
What is Blockchain And Consensus actually?
Blockchain is a distributed, decentralized network that provides immutability, privacy, security, and transparency. There is no central authority present to validate and verify the transactions, yet every transaction in the Blockchain is considered to be completely secured and verified. This is possible only because of the presence of a consensus protocol which is a core part of any Blockchain network. This is what we call algorithm (in this case)
A consensus algorithm is a strategy or procedure through which all the peers of the network reaches a common agreement about the present state of the distributed ledger. In this way, consensus algorithms achieve reliability in the Blockchain network and establish trust between unknown peers in a distributed computing environment.
Essentially, the consensus protocol makes sure that every new block that is added to the Blockchain is the one and only version of the truth that is agreed upon by all the nodes in the Blockchain.
As we all know it, Bitcoin is the first currency that explains blockchain. It was built on an algorithm called PoW-Sha256. PoW — Proof of Work is the consensus strategy and sha256 is the encryption pattern or method. After the PoW algo, a number of algorithms has emerge on the space as they were mostly improvements of PoW. There are several algorithms that followed after Proof of Work and types:
PoW — Proof of Work (sha256, scrypt, X11)
PoS — Proof of Stake (scrypt, Quark)
PBFT — Practical Byzantine Fault Tolerance
DPoS — Delegated Proof of Stake
LPoS — Lease Proof of Stake
PoB — Proof of Burn
PoC — Proof of Capacity etc. (read more on algo …)
Each of the different algorithms that was developed, have their uniqueness and specifics. But I will focus on the LPOS.
LPoS — DEVELOPED BY WAVES
Lease Proof of Stake (LPoS) is an enhanced type of proof of stake consensus algorithm (which opens a new window) and was developed by the Waves Protocol with the aims to achieving a distributed consensus to secure its network.
In an LPOS network, users of the network can lease (or rent) their native currency (i.e WAVES) to peers (operating nodes) that are servicing the network (protocol) to increase the node generating power. Yet, the leased funds do not leave the owners wallet. This is what make waves Protocol different in addition to it’s grand ease of business/project tokenization.
If you leased WAVES to any node, Your WAVES cannot be spent by you or by the node operator. The fund you leased is locked within your wallet until you cancel the lease. Yet it gives consensus power to the node in question. This is the power of LPOS. Lately, the waves team has renamed the lease feature to stake. Either way it’s the same function.
A node on the network is enabled with consensus power if the generating balance of the node reaches at-least 1000 WAVES and above.
WHAT BENEFIT IS THERE IN LPOS
The Leasing benefits for the token holder is that the LPOS allows the token holders to lease their tokens to the Waves nodes and earn a percentage of the payout as a reward.
By using LPoS, a lessor will be able to participate in the process of generating new blocks because the larger the amount that is leased to a Waves node, the higher the chances for that node to be selected to generate the next block. If that node is selected, then the leaser will receive a reward.
The only thing to consider when leasing (i.e staking) is to choose the right node operator, as the operator’s node may work with different efficiency and send back different percentages as rewards.
The node owner may send to lessors a part of rewards according to his conditions they have set as their node summary. The more transactions that are made on the network, the more rewards lessors will get. These rewards are mostly in WAVES but also they can be in the form of different tokens with the unique Waves feature where different tokens can be accepted as a fee.
HOW TO LEASE (STAKE) WAVES
To start leasing (staking), the token holder needs to create a lease transaction and specify the recipient address (node address) along with the amount of WAVES to lease.
HOW TO LEASE (STAKE)
#1. Download & Open Waves.Exchange app, navigate to the Investments tab and click Stake WAVES on the WAVES Staking panel to go to the Waves staking tab:
#2. Click Stake WAVES to open the List of Verified Staking Pools and staking form:
#3. Fill the form: You will be required to fill in the staking form. The staking form contains two fields to fill in: Stake to pool and Amount.
👉 Choose the necessary pool (node) on the left side of the page to fill in the Stake to pool field. To do this, click on it with the left mouse button (this feature is available only on web or desktop wallet. You will need to copy a node address manually if you are using mobile wallet)
👉 After that, specify the amount of WAVES you want to stake in the Amount field and click Stake WAVES.
Then, you will be redirected to the main staking page where in the Active area you will see your new active staking.
HOW TO CANCEL A LEASE (STAKE)
#1. To cancel the lease (staking), open Waves.Exchange app, navigate to the Investments tab and click Stake WAVES on the WAVES Staking panel to go to the Waves staking tab:
#2. In the Active area сhoose the pool which staking you want to cancel - click the Arrow icon and, after that, click Cancel at the end of the line of the chosen staking.
After that, click Cancel transaction in the appeared window to cancel the staking.
Or you can cancel all stakings of the selected pool at once. To do this, in the pool menu, click on Cancel All.
you have any questions related to Waves.Exchange, feel free to contact waves support via customer support button on you wallet.
This guide will work with little difference on staking Neutrino tokens. Only that staking works via Smart Contract and not to a node.
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