Waves platform has three protocols: Waves, Gravity, and Neutrino, while its ecosystem consists of a decentralized exchange, decentralized applications and smart contract programming language, and native WAVES token. 

Waves Protocol 

Wave protocol is the main blockchain with its native WAVES token and is the platform referred to as the place that hosts decentralized applications and smart assets. 

It utilizes what was proposed but dismissed on Bitcoin for its scalability issue and implements the NG protocol for Waves-NG. It increases the blockchain's performance by using "liquid" blocks. Unlike traditional that are fixed in size, these liquid ones continuously grow until the next block is found. 

First, a leader block is chosen by the proof of stake mining mechanism. It doesn't contain transaction data but only serves a purpose as a numerator. These are also referred to as key blocks. When the key block is set, a set of micro blocks have created that consist of ledger entries but are entered by a delegated node (elected leader), and proof of stake isn't used. 

The network is made to adjust its throughput and reach its highest, depending on the network conditions. With this solution in place, the blockchain can handle 100 Tx/second and usually takes about 2 seconds to add a transaction to the block, contributing to the user experience.

To run a node, one must stake at least 1000 WAVES tokens as the protocol runs on a proof of stake consensus mechanism. The node that participates in validating transactions gets rewards in the WAVES token, and the more staked into the node, the more rewards are received. To increase the reward amount or get rewards without running a full node, a user can lease tokens to the node; thus, this is called a Leased Proof of Stake (LPoS).

Reward size is changed by voting from the nodes and is done every 100,000 blocks (around 70 days) for 10,000 blocks. In this time window, the miners can vote to decrease, increase, or keep the current reward size, and when consensus is reached, it stays immutable for another 1000,000 blocks.

Interaction with the blockchain is account-based. All assets and data are associated with the account, which has a pair of keys: a private key that the account uses to sign transactions, and a public key that allows anyone to verify the signature.

In Waves, all blockchain data such as token issues, cryptocurrency transfer, smart contract creation, or invocation are presented as transactions. Thus various transaction types vary depending on its purpose and are divided into three categories: tokenization, usage, network.

Smart contracts and decentralized applications are built using a proprietary programming language called Ride. Based on expressions, it is case-sensitive and has no loops, recursions, and go to-like expressions, and is therefore not Turing complete. Designed in this way, it is fault-proof and aims to minimize the room for making common errors and critical mistakes when developing on the Waves blockchain. The creation and deployment of smart contracts and other scripts don’t require gas, and its developer-friendly infrastructure helps facilitate experimentation and innovation.

Gravity protocol 

Gravity is an oracle layer for Waves blockchain to make possible cross-chain interaction and bring real-word data on the blockchain in a decentralized and trustless way. This is achieved by building a network of nodes that validated external data by reaching consensus instead of relying on a single source of information.

To build a protocol that reaches consensus, it requires an economic incentive to its participants to perform such tasks, but that comes with the conflict of interest as the new layer will favor its network over other data sources and be keen on providing rewards to its operators. 

Gravity is built in a tokenless way to solve this problem of conflicting interest and doesn’t attempt to create new value but instead leverages the value locked in the blockchains it works with. To participate in the Gravity network and run a node, you need to lock a certain amount of the native token for the chain you are mining data on. Those who use that particular chain pay for the data provided, and the rewards are shared by all nodes based on the quality of data provided and a total input received. 

This is what is meant by being blockchain agnostic. The network doesn’t rely on its token to keep incentivizing its participants to provide reliable data. Instead, it behaves like a PoW network where miners (Gravity nodes) provide data in exchange for existing cryptocurrencies of the chains they work on.

In addition to providing data, cross-chain providers can provide liquidity of existing coins and assets for the execution of cross-chain swaps, which is a perfect solution for decentralized financial applications that have to fetch data on price, quantity, etc. from various blockchains in a trustless way and building decentralized exchanges which Waves already has.

Neutrino protocol

Promising frictionless DeFi integration by acting as an interchain toolkit for multi-assetization is the Neutrino protocol. It can perform tokenization of real-world assets like national currencies, commodities, etc. by maintaining price stability through an algorithm and its native token, Neutrino system base token (NSBT), which is held in reserves and a network of oracles (like the Gravity protocol).

The goal is to create a price equilibrium between the capitalization of a tokenized synthetic asset (for example, the dollar’s neutrino) and the capitalization of collateral represented by a native token (such as Waves), similarly like in the case of MakerDAO DAI, whose value is maintained by algorithmic stability. 

Through NSBT, an incentive is ensured that in case of diminishing reserves in the underlying asset that is tokenized, the collateral will be replenished by the purchase of NSBT or release from reserves. NSBT tokens and tokenized assets are further collateralized by WAVES native token to ensure further stability. 

For example, collateralizing WAVES for the USD equivalent value to come up with a USDN stablecoin backed by WAVES is algorithmically maintained at a 1:1 peg to the USD. This is its first use case developed by the Waves platform and can be staked for an 8% to 15% annual percentage yield, depending on WAVES' market price.

Similarly to other DeFi solutions sending collateral to the smart contract and tokenN is created whose underlying value is maintained and guaranteed by the collateral or the NSBT in the last resort. 

Waves Enterprise Blockchain 

There is another hybrid blockchain called Waves Enterprise with a native token WEST and is a combination of a public and private network. Waves Enterprise brings together enterprises, service providers, and decentralized applications in a trustless environment, utilizing the benefits of public permission blockchain across a wide range of business use cases. 

With features like E-voting and Facial recognition, it is perfect for large corporations that engage in d

ecision making through a voting process and track presence and work performance through check-in credentials. 

Waves ecosystem consists of three components:

Network protocols like Waves, Gravity, and Neutrino, with their own set of rules, transaction models, and consensus mechanisms, were covered in great detail in the technology section. These protocols are the ecosystem's backbone, and they introduce multifunctionality and technological base for development and usage. 

The second component is the infrastructure built on top of those protocols. It consists of: Keeper for private key management, IDE for sandbox development, smart-contracts programming language RIDE, and other tools for dApp development, APIs, libraries, tools, and frameworks.

The third and most practical application layer consists of a large set of decentralized apps such as decentralized exchange (DEX), mobile apps, and mining and voting apps. Various dApps are running on the network for staking and lending its USDN token.

Waves platform has immense use case possibilities. As a platform that enables all the tools and necessities to build and engage in a decentralized economy, it is suitable for plain users. They want to perform transactions of value for developers wanting to build decentralized applications and for enterprises wanting to mitigate their existing infrastructure on the blockchain. 

The functionalities and features of the Waves ecosystem are suitable but not limited to: decentralized finance applications (DeFi), decentralized autonomous organizations (DAO), donations and crowdfunding, escrow service, referral, and loyalty program, marketplaces, P2P lending, gaming, voting, digital identity management and much more. 

Waves ecosystem is composed of all the tools needed to participate, build, and do business in the distributed economy. 

Its WAVES token is used both as a native token to the blockchain for doing transactions and for staking in the nodes to validate transactions and earn it as rewards. Another essential function is being used as collateral for creating the USDN stablecoin as it is backed by a certain amount held in reserves.