Why Investors Should Be Paying Attention to WAX | Hacked: Hacking Finance

Investing in trends is one of the best ways to get rich, because you don’t necessarily have to be right about the company, you just have to be right about the wave they’re going to surf. Examples of trends include marijuana, e-commerce, and most recently, video games.

Another trend you are more likely to be well-versed in is the spread of blockchain and cryptocurrencies. The natural move for companies looking to capitalize on these trends is to mix them and see where it takes them.

Asset Exchanges, But for Video Games

It is becoming extremely common for companies to emerge that offer the promise of moving the tracking and trading of certain assets onto the blockchain. WAX, or Worldwide Asset Exchange, is one such example, but they have the advantage of trading in virtual assets that are easily tracked.

To the outside world, this may seem like a relatively niche market, but you couldn’t be more wrong. Video games and the industries that surround them a massive market that most people don’t realize contains 400 million gamers in possession of over $50B of virtual items.

Trust is Not the Answer

Currently, most of the exchanges for virtual assets like skins, finishes, or special powers in video games face a major issue: they all depend on trust. But this isn’t scalable, especially if you want to start connecting the marketplaces for different video games.

The current model is one of consignment, which leaves a lot to be desired in terms of the risk vendors face. Vendors either have to trust people or use a third party, neither of which is an efficient solution.

Decentralization is the answer to most trust issues. WAX answers these problems by using smart contracts on a peer-to-peer marketplace, and the result is much better than anything currently available.

The Mechanics

The platform works fairly simply. They remain asset agnostic by listing every asset on the platform in terms of WAX, which leaves its price “pegged” to WAX and creates stickiness to the platform.

If one wanted to transfer their asset they would send it to a transfer agent, who facilitates the trade. Transfer agents may sound like a risky third party, but they are forced to put up a bond in WAX in order to participate, which makes them forcibly trustworthy.

The rest of the transfer process has the transfer agent set up the pickup and dropoff dates, take control of the asset, and deliver the asset. The whole time, this is tracked using a Settlement Execution Contract.

Betting on the Trend

WAX had their token ICO near the end of 2017, after which is promptly nosedived. There were originally worries over it potentially being a pump n’ dump after it crashed each time it was added to exchanges, but these worries seem to have dissipated.

The WAX token is available on both Binance and Bittrex, and is currently priced around 0.0001554 BTC. It is ranked a moderate 68 on coinmarketcap.com in terms of market capitalization, and recently went through a big run up and drop in early November. The main reason to consider buying WAX is if you are ready to make a long-term bet on the future of the video gaming industry, and WAX’s ability to partake in it. The need for a decentralized marketplace for video game virtual assets is real, but it isn’t for sure that WAX will be the company to satisfy this need.

Featured image courtesy of Shutterstock.

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