The Path Toward Aggressive Decentralization
It's the end of the beginning for Crypto. The bubble has burst. Only true value will remain. The centralization of crypto was temporary but necessary, to bootstrap the space to a generation of people during the pandemic and the bull market of 2021. But it never reflected the values the entire space was founded on with the Bitcoin Whitepaper in 2008.
The core value of blockchain is decentralization.
Booms and busts occurring on centralized exchanges are in large part, a result of the centralization of power, over highly volatile and unregulated cryptoassets. The paradox of the “Crypto” era - is that “decentralized crypto currency” has 50-80% of their token supply held on a single exchange. In reality decentralization was all an illusion.
Now the curtains are drawn back. We believe the public is starting to understand deeply that centralized crypto is a problem. People are looking for an antidote to the corruption, collusion and manipulation that centralized systems facilitate. The chaos of the situation centralized crypto purveyors have created is technically impossible with a suite of truly decentralized applications and assets, deployed on a verifiably decentralized ecosystem.
Introducing Waves - A fully decentralized ecosystem of Dapps on the path to full community control.
The decentralized products built on Waves provide ALL of the services a centralized exchange provides, and preserve your ability to access and control your assets. Choosing to trust a centralized exchange with custody of your assets will always require you to renounce the unconditionally the ability to access and control your assets.
Since our launch in 2016, Waves’ vision has been to fully decentralize all operations, and hand over full control to the community - when the time is right. Recent market developments from Celsius, to 3AC, to FTX and Alameda reveal centralized entities claiming publicly to protect their investors, while unfortunately doing the opposite. The time has come to accelerate Waves’ plan to move towards total decentralization.
Waves Ecosystem while its way towards becoming fully decentralized has a few components that need adding. The following feature upgrades will be implemented this year:
- Decentralized stablecoin - Friday 16th December
Neutrino will announce and propose the plans to migrate its decentralized stablecoin to full community ownership with the Neutrino 2.0 upgrade. The plan will outline the new direction for Neutrino to become a ‘decentral bank’ for the Waves ecosystem. With the addition of new monetary policy entirely controlled by its community. The community will decide how and when to issue the stablecoin, how to spend the treasury, and a new market maker bot will help to maintain the peg of the stablecoin vs the dollar.
- Decentralized bridges - Wednesday 21st December
We will announce the whitepaper for decentralized bridges. The current bridges are centralized which is causing delays to user’s withdrawals from Waves network to other blockchains. By decentralizing the bridges users will have full transparency over the operations and transactions of the bridges. They will also be able to vote to improve how the bridges operate.
- Fiat onramp and offramp - Coming soon
To provide ALL the infrastructure of a centralized exchange, users must be able to deposit and withdraw fiat currency. While WX network already has a fully functional fiat on-ramp, off-ramp features with direct to bank account transfers will be added next.
- Fully functional decentralized governance - Coming soon
Single token governance systems are flawed, they allow for the centralization and hijacking of power by large entities. Waves Ecosystem is the ONLY blockchain with a solution to this in Power Protocol. We will outline the migration of Waves community Governance systems to Power Protocol below. This will give all Waves community members - at first - equal say over the governance of Waves ecosystem projects. Over time the most productive members will earn the larger share of POWER based on their supported proposals helping to achieve the ecosystem’s goal of maximum decentralization.
The path towards decentralization
We are aware that while efforts are being made to fully decentralize all operations of Waves, this process actually lacks necessary transparency. So today Waves is formally announcing it’s commitment and path to full decentralization, full community control of every dapp in the ecosystem. While this has been the plan for many years, it has not been communicated publicly and we aim to get commitments from every project in the ecosystem to the following framework.
The decentralization framework
Stage 1: Product market fit - Minimal Decentralization
Every project when it starts out, needs a centralized team to build the product and achieve product market fit. In this state the product development team is working independently while taking into account the community feedback, to build something of value. The team can take on funding or grants and receive assistance from the community in marketing and business development.
Stage 2: Community participation - Moderate Decentralization
Once product/market fit is achieved the project must achieve a moderate level of community participation in the product and make strategic decisions. It is important to ensure the product builds momentum, gains users and gets traction.. During this stage, community members must support and engage with the core team to discuss and approve the correct proposals that are most likely to work. At this stage proposals are primarily created by the core team.
Stage 3: Full community control - Maximum Decentralization
Once community participation is achieved, the project’s genesis team can begin to hand over the operations to the community. The community will begin to make the proposals directing product development, but also make decisions on hiring, marketing and business development strategy
The WAVES Association DAO - Building the Most Decentralized Ecosystem on Earth
The above framework provides a way of ranking each project within the ecosystem, to transparently measure its level of decentralization. However without an entity responsible for controlling and directing each project towards decentralizing, this framework could become an empty promise.
We propose the Waves Association DAO have a single goal - to fully decentralize the operations of every project built on Waves. It will have a core KPI - the number of projects that have reached Stage 3: Maximum Decentralization within a certain period of time.
The Waves Association DAO will be built as an Special Purpose DAO using the Power Protocol. All the stakeholders of PowerDAO will be able to propose plans to ensure each project progresses towards achieving Stage 3: Maximum Decentralization. Power Protocol is a unique governance system that incentivizes productive actors and disincentivizes bad actors. More $POWER token is awarded to those that vote to approve proposals that align with the community’s mission, and $POWER token is destroyed (via automated stake slashing) from those people who vote and approve proposals that distract or hinder progress towards the community goal.
This will make Waves Association DAO the first operation verifiably dedicated to maximum transparent decentralization from the very start.
The first initiative for the Waves Association DAO will be to transparently audit the decentralization of each project, and create a public rankings system. Displaying the stage of each project in the ecosystem, and what steps they need to take to become stage 3.
The WAVES commitment to decentralization
To demonstrate the commitment to this path, Waves team will be donating $10million of the governance tokens they currently hold for every project built on Waves, to the Waves Association DAO. The Waves Association community will therefore have FULL control over the governance of each individual project that commits to this initiative.
This is the most radical path and commitment towards full decentralization that any blockchain project has ever made. It is a decision not taken lightly and will require immense involvement of the Waves community to implement. It is, however, a necessary step to build the most resilient, independent, and self-sovereign blockchain ecosystem in the world.
Crypto is dead, let’s make new Waves, together at last.