Worldwide Asset eXchange (WAX)

Global Decentralized Marketplace for Video Game Virtual Assets

White Paper

Version 1.7

From the founders of OPSkins

opskins.com | waxtoken.com

December 23, 2017

By Jonathan Yantis, COO, WAX | William Quigley, CEO, WAX | Malcolm CasSelle, President, WAX

WAX is the onramp for mass market

cryptocurrency adoption.

-William Quigley, OPSkins CEO

From the founders of OPSkins

opskins.com | waxtoken.com

Special thanks go to Jonathan Yantis, the creator of real money trading

for virtual items in 1997 and to John Brechisci, Jr., for creating OPSkins to

enable skins to be freely convertible into at almost anywhere in the world.

Market Problem

Solution: Worldwide Asset eXchange (WAX)

WAX Value Proposition

WAX Team

WAX Functionality

WAX Protocol

WAX Tokens

WAX Accounts

Delegated Proof of Stake

Guilds

Transfer Agents

Transactions and Messages

Voting

Contracts

Proposal

Rating

Listing of Virtual Goods

Purchase of Virtual Goods

Settlement Execution Contract

Dispute

Transfer of Digital Goods

WAX Applications

WAX Connect

WAX Node

WAX Wallet

WAX Core

WAX Roadmap

WAX Token Sale

Token Sale

Market Development

Contributers and Advisors

WAX Team and Founders

Token Sale Process

Use of Proceeds

Legal Requirements

Summary & Conclusion

Appendix A: WAX Use Case

Appendix B: Marketplaces Create Wealth

Centralized Virtual Goods Marketplaces

Constraints of Centralized Marketplaces

Benets of Decentralized Marketplaces

Appendix C: Virtual Goods Trading

Virtual Goods Example: Item Skins

Table: Key Friction Factors in Virtual Goods Trading

Disclaimer

Each year, 400M+ gamers purchase $50B+ in virtual items

worldwide. 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. This market friction is the key

factor limiting the growth of this $50+ billion market.

The net effect of the lack of marketplace trust is that the

virtual asset trading industry is fragmented across hundreds

of competing marketplaces, each utilizing different business

practices tailored for their region of the world. This creates

signicant territorial supply and demand imbalances.

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. Such a

repository, when coupled with distributed trust mechanisms, and

a reliable low-cost settlement network, will vastly improve price

discovery and market liquidity, thereby increasing market size.

Market Problem

OPSkins, the world’s largest platform for video game

virtual goods traders is building a blockchain protocol

called Worldwide Asset eXchange (WAX), designed to

enable an unlimited number of marketplaces operated

by individuals or small businesses to buy, sell and

trade virtual goods at scale with just a few clicks.

“

Solution: Worldwide Asset

eXchange (WAX)

The role of the WAX Platform as a virtual goods marketplace is to

decentralize exchanges while allowing users to purchase goods with

a global token. With this important shift in structure, millions of buyers

and sellers will have the power to use their social graphs to buy and

sell virtual goods effortlessly. WAX can support a variety of selling

structures to maximize liquidity, such as bidding, reserve bidding or xed

price. The cottage industry of buyers and sellers currently served by

OPSkins will not have to develop complex backend systems but, instead,

will use the WAX Platform to leverage the most powerful aspects of the

OPSkins asset exchange.

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). These platforms enhanced commerce for millions

of small business owners and created hundreds of billions of dollars of

Seller BuyerWAX Listed Asset

Oer Accepted?

YES

ASSET TRANSFER

PAYMENT

TRANSFER AGENT

new value by making their platforms easy to use and widely

available, while simultaneously solving expensive problems

like fraud prevention, settlement execution, product and seller

reviews, standardized catalogs of product information, supply

and demand matching, etc.

WAX Value Proposition

WAX is a decentralized platform that enables anyone to operate

a fully functioning virtual marketplace with zero investment into

security, infrastructure or settlement. Developed by the founders

of OPSkins, the world’s leading marketplace for online video

game assets, WAX is designed to serve the 400+ million online

players who already collect, buy and sell. With the inclusion

of WAX’s simple exchange widget, gamers will have access

to a worldwide market, with blockchain trust and transaction

verication.

A user decides to purchase a virtual good by selecting

“buy now” in the WAX widget and is presented with

an authentication window. If this is the rst time he

is interacting with the WAX Platform, he’ll be taken

through an onboarding process that creates an

identity, allocates a WAX Wallet, and allows him to

fund the immediate purchase, all without forcing him

to understand WAX, the WAX Platform, or WAX Tokens.

From the buyer’s perspective, all that is required is to

select an item, provide payment, and, a short while

later, the item shows up in his personal inventory

without him ever leaving the site he was visiting.

“

The WAX Platform will allow millions of traders to create their own

virtual stores on one decentralized platform. The WAX Platform unites

everyone, providing security, transaction, and settlement services that

will usher millions of new participants into a growing ecosystem.

1 See https://mygaming.co.za/news/features/89913-there-are-1-8-billion-gamers-in-the-

world-and-pc-gaming-dominates-the-market.html

OPSkins introduces the WAX blockchain protocol, connecting

2 billion gamers worldwide

to a highly sophisticated virtual

goods exchange. By decentralizing these exchanges, vastly

more trading in the already sizable $50 billion video game

virtual goods trading market is possible.

“

WAX20152004

Decentralized Marketplace

The WAX Platform, a decentralized

marketplace, allows buyers and sellers to deal

directly with each other at low cost.

Centralized MarketplacePeer-to-Peer Transactions

As World of Warcraft grew to 12 million

subscribers, a vibrant peer-to-peer secondary

market develops to sell in-game goods for cash.

For most users, this was risky and dicult.

With massive liquidity, buyers and sellers get the best prices and the

quickest settlement, while the global gamer community as a whole

receives their own secure virtual asset exchanges on the blockchain

with WAX. Similar to how marketplaces such as Amazon, Alibaba, Uber,

and Airbnb changed commerce for millions of small business

owners and created hundreds of billions of dollars of new value,

WAX empowers a new generation of virtual asset traders.

400+ million multi-player online gamers are increasingly familiar

with buying and selling virtual online game assets. To provide

a trusted third party assist, transfer agents are required to

facilitate moving items from sellers to buyers. This complicated

process is operated by a combination of Application

Programming Interfaces (API’s) and bots. Virtually all the open

source software used in the industry was written by the OPSkins

team. OPSkins, a pioneer in the online gaming industry, has

developed the method for WAX to empower all key constituents

of the ecosystem to earn more by expanding their ability to buy

and sell online game assets.

For example, a site attracts someone to list their item for sale,

that site owner would get a share of the listing fee. Similarly, if a

site attracts a buyer who ultimately buys an item, that site owner

would get a share of the transaction fee. Many aliates working

with OPSkins today have already leveraged their participation

into small virtual goods businesses. But that process is

complicated, settlement takes more than 30 days, and there are

problems with transaction verication and accounting.

These and many not-yet-developed silos of activity will work

independently and collectively to make the decentralized

exchange work. OPSkins runs as a centralized mechanism,

and by sort of “exploding those out” and atomizing them, we

allow the whole ecosystem to grow, because everyone gets to

play a role where they can provide value. Now rather than one

market player many times larger than its nearest competitors,

thousands of sites can all be just as signicant without having

to invest tens of millions of dollars in software development and

hardware infrastructure.

WAX Team

Created in 2015, OPSkins quickly became the global

marketplace leader for video game virtual assets. The company

has facilitated over 100+ million purchases annually for millions

of customers across 95 countries. OPSkins built a centralized

solution to address the greatest needs of the marketplace,

reducing friction between buyers and sellers. These challenges

are non-trivial and create a high bar for success: critical mass of

buyers and sellers to create liquidity, settlement execution due

to lack of trust between buyers and sellers, 100% of fraud loss

shifted to the platform rather than the customers, cross-border

execution, multilingual offerings, etc.

In building the number one centralized marketplace, OPSkins’

founders recognized an even greater potential to grow the

market by decentralizing it and giving the power of the

marketplace to millions of video game entrepreneurs and

inuencers who have social graphs, trac, content, and existing

followers. By shifting the parts of the marketplace that are

complex and expensive to build to the video gamer ecosystem

and by decentralizing those components on the blockchain, the

market will grow even faster than it has already, and everyone

will be able to benet from that growth.

2 See http://www.reuters.com/article/us-deutsche-boerse-gaming-idUSKBN13Q4ZG

Normally the place to buy or sell shares in Germany’s

top companies, Deutsche Boerse is launching a new

exchange for people to trade virtual goods from video

games, tapping into a multi-billion U.S. dollar market. -

FRANKFURT (Reuters)

“

WAX Functionality

WAX is a global peer-to-peer marketplace for video game virtual goods

trading based on decentralized smart contracts on the blockchain.

The WAX platform will allow the global pool of buyers and sellers to

access the global supply of virtual goods in a decentralized market

while eliminating nancial risks they encounter from the prevailing

consignment-based marketplace model in use today. Utilizing smart

contracts that incorporate the OPSkins team’s 20 years and billions of

transactions of virtual item experience, WAX supports a platform where

all market participants—listing and selling agents, item settlement

agents, appraisers, aliates, buyers, and sellers—will merchandise,

apportion fees and settle transactions quickly and securely.

Buyer

Seller

Game Asset

Wax Exchange

What are the shortcomings in the existing ecosystem of decentralized

exchanges? They don’t support the specic needs of the online video

game asset trading market. Here is a comparison to some of the more

well-known offerings.

WAX Protocol

The WAX Protocol is a decentralized blockchain solution that focuses on

the transfer and exchange of virtual goods and services. This protocol

is focused on serving the rapidly growing gaming industry but is exible

enough to meet a variety of other use cases.

WAX intends to meet the needs of customers who use a huge number

of gaming platforms—each with their own exchange model and transfer

conditions—while supporting the entire network. To meet the high

throughput demand of these markets, a Delegated Proof of Stake (DPOS,

further explanation below) consensus algorithm was selected, with

selected conrming nodes, or “Guilds”, focusing on a single game.

WAX Tokens

WAX Token (market abbreviation WAX) is the native token of the WAX

Platform, and supports all activities and functionality on the WAX

Platform.

WAX Token is a platform utility medium that enables users to list items

for sale, transact value between each other, settle the transfer of virtual

goods, create and service contracts, and propose and vote for WAX

Decentralized

Exchange

Multi-Party Payout

Settlement Agent

Asset Agnostic

Guilds. The application of WAX Token is entirely focused on

these functions, and developed to strongly enforce security

during digital exchange.

Virtual goods’ sales prices are listed in WAX Token; when a user

wants to purchase the virtual good they pay with WAX Token. If

the item is listed in a different currency (through a site linking

to the WAX Platform), the WAX Token must be converted by the

listing agent at the current exchange rate at time of purchase.

The number of votes a user can distribute to one or more

Guilds is equivalent to the number of WAX Tokens such user

holds. When WAX Tokens are transferred, the vote allocations

are diminished by the same amount, so it is important to hold

a reserve of WAX Tokens to ensure a user’s delegated votes

remain suciently high.

A small amount of WAX Token is also used during transactions

and messages, as a fee for using the network. This fee, similar

to ETH Gas and Bitcoin Fees, incentivizes Guilds to include

transactions into blocks.

All accounts have the ability to transfer WAX Tokens between

themselves and other users. This involves the reassignment of

asset (X) from one account (A) to another (B), with enforcement

that the originating account (A) was in possession of at least

that many WAX Tokens (X) before the transaction was approved.

All settlements on the WAX Platform are conducted in WAX

Token. Since WAX Token is divisible to 18 decimal places

(10-18), the transfer of WAX Token also allows for micro-

settlements, a feature likely to be leveraged for future virtual

goods.

WAX Accounts

On the WAX Platform there are four types of accounts, three

controlled by external agents and one autonomously; Users,

Guilds, Transfer Agents, and Contracts. Each of these accounts

serves a distinct role in the WAX Platform.

User accounts control a single private key, and corresponding

address, with which they create and sign transactions. Users may

control WAX Tokens as well as digital goods, and cannot have

their control of these goods revoked by any other user. Most User

accounts will be proxied by an exchange and listing website (such

as OPSkins.com), though it will be possible for a User to directly

interact with the WAX Platform.

Guilds are the conrming nodes of the WAX Platform and are

elected by DPOS from users. Each Guild is created with a private

signing key and corresponding address, as well as a single public

encryption key and private decryption key that is used in a multi-

party encryption schema for listing assets. Guilds are responsible

for forming blocks of transactions and must sign these blocks

and transact them to other Guilds on the WAX Platform. For

this service, they receive the fees earned within the block, and

periodically transfer a percentage of these fees to their pledged

stakeholders.

Transfer Agents are responsible for the in-game transfer of digital

assets between Users. These accounts control two Hierarchically

Derived (HD) Private Keys. The rst is used to generate a master

address and child addresses for the acceptance and transfer

of virtual goods and WAX Tokens. The second is used to create

unique public encryption keys to accept messages from Users.

Through this channel, Users can securely communicate their in-

game contact info to transfer or receive virtual goods. Each time a

Transfer Agent accepts a Settlement Execution Contract, the WAX

Platform will force the iteration of the HD Key.

Contracts are code stored in the WAX Platform state, that can be

executed by external agent accounts. Contracts created on the

WAX Platform are executed immediately and return the Contract

address and functions. The WAX Platform supports a limited

number of Contracts, such as Proposal, Listing, Settlement

Execution, Request, and Virtual Good.

Delegated Proof of Stake

The WAX Platform uses a type of Delegated Proof of Stake

(DPOS) consensus algorithm, originally created by BitShares.

This system allows for high transaction throughput, with the

condence of network support and trust.

Unlike a traditional Proof of Work system, conrming nodes

are elected by users who pledge votes to proposed delegates.

Holders of WAX Tokens will be able to submit proposals to the

network for the election of a conrming node, called a “Guild” on

the WAX Platform. Users will vote on the submitted proposals

of potential Guilds, as well as existing Guilds. The WAX Platform

will initially support 64 elected Guilds; Guilds are then ranked

by the number of votes they receive, weighted by the game they

support in their proposal.

Relying on WAX’s user base to elect Guilds (the elected

delegates) will create sucient decentralization to ensure a

secure and trusted exchange. Users and Guilds (but not Transfer

Agents) may pledge their WAX Tokens to proposals but cannot

pledge to themselves.

Users are allowed to pledge only up to a total of eight

proposals—and only one proposal per game or game/server—

preventing large holders from unduly inuencing a single game.

As the user base supports many different titles, this will ensure

votes are cast across numerous franchises and Guilds.

If users begin to lose condence in a Guild, they may switch their

delegated stake at any point to another Guild or proposal. While

this will not force an immediate change in Guild status, it will

alert users who support the Guild.

Users are encouraged to keep their WAX Tokens pledged

through the earning of pledge rewards. A percent of the Guild’s

earned fees will be redistributed to pledged Users, in proportion

to their delegated stake amount. This system allows users to

support the network through DPOS, while also not limiting the

ability to change votes in favor of better Guilds.

Guilds

Guilds are the conrming nodes of the WAX Platform. Guilds will

conrm transactions in a round-robin order. This ensures that

all transactions are conrmed by at least one impartial party

and maintain consensus of the network, while also retaining the

speed and eciency of a DPOS consensus.

While the WAX Platform will have 64 Guild positions upon

release, this will be increased as new games and servers are

released. This is easily signaled by the community presenting

proposals for new games and/or servers not currently

represented by a Guild. If these proposals receive enough

votes during a set time period, the list of Guild positions will be

expanded by eight. This balance prevents the number of Guilds

from outpacing the WAX Platform’s user community, while also

prioritizing user demand for new games and servers.

Beyond consensus, Guilds have additional responsibilities to

promote network health. For a Guild to be elected, they must

rst submit a proposal to the network that states the game they

will service, the percentage of fees they will share to pledged

users, and how they will monitor Transfer Agents. When a Guild

proposal is approved, their public encryption key will be added to

the multi-party encryption schema used for listing on the game

or game/server.

Each Guild will focus on a single virtual good platform game or

game/server. For example, a Guild may be formed for World of

Warcraft “Aegwynn” server. Players of this game or game/server

will therefore be encouraged to support the proposal, while

simultaneously supporting the entire WAX Platform. Popular

games and servers may have more than a single Guild, providing

additional choice in services.

Guilds are responsible for assigning Transfer Agents to a

purchased listing and transferring the contact details for users

to the transfer agent. When a purchase is made, Guilds that

service the items’ game or game/server will be assigned the

transaction. They will assign a Transfer Agent to the purchase,

and the rst one conrmed by the network will become the

accepted record. At this point, the Transfer Agent will have their

HD keys iterated, and the Guild will encrypt a message of the

contact details for buyer and seller to the Transfer Agent. To

ensure this process runs smoothly, Guilds will devise systems to

select Transfer Agents based on proximity to buyer/seller, time

since last transfer assignment and activity level, overall number

of current settlement execution contracts assigned, and—of

course—Transfer Agent’s reputation score.

The Guild’s overall trust score is based on a combination of its

delegated votes from users, as well as the average rating for

active Transfer Agents for its game—a rise in dishonest Transfer

Agents could lead to users switching their vote and the eventual

disbanding of the Guild. As such, Guilds can ban Transfer Agents

who have received a number of disputes.

Guilds are incentivized to high-quality service by receiving a

percentage of the fees on lists, transfers, and Contracts. These

fees are earned on the virtual goods they conrm during their

conrmation turn, with additional bonuses paid out on virtual

goods from their proposal. This encourages competition in the

most popular and expensive marketplaces while providing a fair

fee structure for games with a smaller user base.

Transfer Agents

Transfer Agents are users entrusted to accept and transfer

virtual goods between users. A Transfer Agent is approved

only for one game or game/server, and cannot change its

association. It must also put up a bond of WAX Tokens, of

which it cannot exceed 25% of total value of currently assigned

Settlement Execution Contracts. For settlement execution

services, its will be rewarded a percentage of the fee with WAX

Tokens.

Transfer Agents may signal to the Guild that they are actively

looking for additional settlement execution contracts and are

currently on-line. Conversely, if a Transfer Agent no longer wants

to participate as a Transfer Agent, it must rst complete its

assigned settlement execution contracts, and can then signal its

retirement to the Guild. It will then receive its full bond of WAX

Tokens back.

Transfer Agents perform a critical function in the WAX Platform.

Transfer Agents will be responsible for enacting in-game trades

of virtual goods purchased and will be expected to:

1. Communicate with seller and buyer to arrange pick-up and

delivery of item

2. Take control of the virtual asset from the seller

3. Verify the authenticity of the virtual asset

4. Digitally sign the Settlement Execution Contract that they

have received the virtual asset

5. Deliver the virtual asset to the buyer

6. Digitally sign the Settlement Execution Contract that they

have delivered the virtual asset

In addition, Transfer Agents may be called to arbiter disputes

raised by users against other Transfer Agents. These services

are rated by buyers and sellers, and they must maintain a high-

level of quality service or risk being removed.

Transfer Agents’ accounts have two public keys; the rst is a

HD signing address and is similar to other users. The second

is a HD public encryption key, allowing users to send secure

messages with their in-game username, location, trade-URL (i.e.:

for steam trades), etc.

When a Transfer Agent is selected for a Settlement Execution

Contract, the Buyer and Seller will be alerted. They can send

encrypted messages to the Transfer Agent to communicate

meeting logistics. The Transfer Agent can communicate back

(though unencrypted) with clarifying questions or additional

details. This allows the Transfer Agent to meet users in-game

with minimal risk, while also protecting users from Transfer

Agents working with either a buyer or seller to deceive the other.

Transactions and Messages

Transactions and Messages on the WAX Platform are any signed

data package that is communicated between accounts. A transaction

refers to communication originating with an external agent, such as a

human user or external bot. Messages are similar to transactions but

are executed by Contracts on the WAX Platform. Both transactions and

messages incur a small fee of WAX Token when called, used to support

the conrming Guilds.

Broadly speaking, there are three types of communications on the

WAX Platform: transfer of WAX Tokens, deployment of Contracts,

and interaction with Contracts. Each can be called as a transaction or

message, depending on the actor. They each are formed as below, with

the sender being implicitly named by the state:

nonce The transaction or message number of the account communicating

waxfee The fee (in WAX Token) associated with the transaction or message type

to Destination address of the receiving account

value The amount of asset being transferred; possible to be blank

data

A call for the WAX Platform to execute the deployment or interaction with a

Contract, as well as any variables to be passed; this will indicate which assets

(WAX Token, WAXT Tether, Digital Asset) are being transferred

signature The ECDSA signature of the transaction/message, signed by sending address

Voting

Users who wish to vote with their WAX Tokens to support a Guild or

proposals can do so easily from their wallet. From the wallet, a user

selects “Proposals” to review the current Guilds and available proposals,

as well as their current allocation of delegated WAX Tokens.

Users may vote for up to 8 Guilds or proposals, and their share

of votes (held WAX Tokens) will be distributed evenly amongst

them. The user will select the delegates it wishes to support and

then transact a vote. While voting costs WAX Token fees, the

vote cost is the same whether selecting eight new Guilds or only

swapping one.

Contracts

Contracts refer to executable code on the WAX Platform; on

WAX, there are a limited number of pre-created contracts that

can be executed. As the WAX Platform continues to develop,

new contracts and control features will be merged into the

protocol.

Proposal

The Proposal Contract includes the Guild’s application to be

a conrming node, as well as the list of delegated stake from

users. “Proposal” is a transaction executed by a user, to elect a

new Guild as a conrming node to the network.

A proposal message will include; the game or game/server the

Guild will provide services for; the fee sharing structure between

the Guild and pledged delegates; and address of a user account

to serve as the Guild address during execution. Only users who

have at least 10 WAX Tokens and are not currently pledged to 8

proposals may call “proposal”.

Upon creation, a minimum of 10 WAX Tokens from the creating

user’s account are automatically delegated to the proposal. The

proposal may now receive delegated stakes from other users.

The rankings of proposals are ordered by vote count, and guild

statuses are awarded or rescinded based on the overall rankings

and number of guild spots.

If a proposal for a Guild ever falls below 10 WAX Tokens, the

Guild will be dissolved immediately and the remaining assets

transferred to the pledged users. If a Guild wishes to change any

of the features of its proposal it must submit a new proposal

and can signal to its pledged stakeholders for the change.

Rating

Users, Guilds, and Transfer Agents will each have a rating

contract based upon their transaction history and interaction

with each other. When two parties have an interaction with each

other, such as listing/buying or direct transfer, they will have an

ability to rate a user.

The rating is crafted from more than the votes of other accounts:

each transaction, dispute, and settlement is aggregated

and used to calculate the ability for an account to perform a

trustworthy action. Each action type will have a different weight,

but the overall metric will be useful to the entire WAX Platform.

As more transactions occur, the rating system will automatically

adjust for the account. Long patterns of good behavior will raise

an account’s ratings, while short periods of bad behavior can

plummet a rating.

Listing of Virtual Goods

User accounts may list their virtual goods on the WAX Platform

and instantly connect to a worldwide market. When listed,

the virtual good is able to be searched by anyone and can be

displayed easily on websites through the WAX SDK.

“List” calls a Contract transaction, which will create the listing.

To meet this service, a small fee is leveraged in WAX Token

for the listing. In addition, a bounty (list_fee) is placed for the

facilitator, such as the website where the buyer purchased the

virtual good.

A typical list includes the virtual good name, the game or

game/server it is located on, the listing medium, and the price.

Delivery time for the seller to deliver to the Transfer Agent is

also included, and reects the overall price of the asset; shorter

delivery times incur a higher fee, but have less time to complete

before they are found in fault of the settlement execution

contract.

The selling user’s contact information is encrypted using a multi-

party schema which includes the public encryption key of each

Guild serving the virtual good’s game or game/server. This is

also done for the “pick up” URL if available.

The listing user may later invoke this contract’s cancel function

to end the listing and return the list_fee. The wax_fee is non-

redeemable because it was awarded to a Guild for conrming

the transaction at the time of the contract creation.

Purchase of Virtual Goods

Purchasing a virtual good is a function of the list contract. All

users of the WAX Platform have full access to the entire list

catalogue of virtual goods for sale. They can easily browse them

and make choices on their purchase by reviewing historical

pricing data stored in the WAX Platform blockchain.

When a buyer wants to buy a virtual good, it can then purchase

the item listing by sending a transaction to the listing contract

with the requested amount, plus a settlement execution fee. This

can be transacted easily in WAX Tokens, which can be converted

by external parties into other currencies at the time of purchase.

The buying user will also submit their contact information after

encrypting it with the multi-party schema comprising the keys of

each Guild serving the virtual good’s game or game/server. This

can also be done for the “drop off” URL if available.

When the purchase transaction is complete, a Settlement

Execution Contract is deployed via message.

Settlement Execution Contract

Settlement Execution Contracts will be deployed by message

from a list contract following the purchase function being

successfully called. The transferred assets used to purchase the

listing, details from the listing, and the encrypted contact details

will be transferred. At this time the list_fee is transacted to the

address of the intermediary through whom the buyer purchased

the goods. If no intermediary was used, the list_fee will be

returned to the seller.

Guilds for the game or game/server will then compete with

each other to select a Transfer Agent from their active list. The

Transfer Agent is responsible for acquiring the virtual good from

the seller, and ensuring delivery to the buyer. Only one Transfer

Agent can be selected for a Settlement Execution Contract.

The Guild will next decrypt the messages containing contact

information and securely encrypt a new message to the Transfer

Agent with contact details and timestamp. The Transfer Agent

will then arrange to meet both buyer and seller in the game or

game/server, or transfer the virtual goods via “pick up” and “drop

off” URLs.

In either case, the seller must then transfer the virtual goods to

the Transfer Agent. When the virtual good has been delivered,

the seller will sign a transaction to the Settlement Execution

Contract conrming the trade. If the seller fails to deliver the

virtual good, it will receive a negative rating: low ratings may be

ignored by other users, and if a seller has a rating that is too low,

its listings will be removed by the Guild.

When the Transfer Agent receives the item, it will then conrm

the virtual good’s authenticity. If the item is as described in the

listing, the Transfer Agent will sign a message to the Settlement

Execution Contract. If both signatures from the seller and

Transfer Agent have been collected, the purchasing funds will be

released to the seller.

With the virtual good in its custody, the Transfer Agent next

contacts the buyer. When contacted, the virtual good is

transferred to the buyer. A second signature from the Transfer

Agent conrms the delivery, and the settlement execution fees

are released to the Transfer Agent.

Dispute

For disputes against a Transfer Agent, a user creates a contract

with a bond equal to half the disputed amount. Additional details

such as Transfer Agent address, the listing, settlement execution

contract hash, and assigning Guild are also included

Upon receipt, the Guild must select a neutral Transfer Agent

to arbiter the resolution. This Transfer Agent will review the

transactions that took place, and may request additional

documentation from users and Transfer Agents.

Using this information, the arbiter will make a decision of nding.

If the dispute contract is true, the Transfer Agent’s bonded WAX

will be deducted for the dispute value, plus 10%. No funds will be

sent to the arbiter, but its rating will be increased.

Transfer of Digital Goods

Certain publishers may allow the creation and trade of digital

goods directly; for these games or game/servers, the WAX

Platform will tokenize the virtual goods. These tokens are

representations of virtual goods, and are each unique and

therefore non-fungible. The WAX Platform achieves this through

an asset tokenization smart contract that records the virtual

goods information and metadata into each token minted.

For a qualifying digital good, the item will be digitized at the time

of listing. When the tokenized good is purchased, this asset will

be transferred directly to the buyer, and the seller immediately

paid. Services outside of the WAX Platform will transfer the

asset between the two parties, to ensure the state of ownership

matches the game or game/server conditions.

OPSkins currently uses a centralized approach to support a

dozen games. By implementing the above on the WAX Platform,

65 games would be immediately tradable.

WAX Applications

WAX Connect

WAX Connect will be a browser-based SDK that provides a set

of functions to allow building listing widgets, performing wallet

transactions on remote wallets, and performing seamless

onboarding of new users into the WAX Platform. WAX Connect

will perform automatic node discovery based on guild (game

or game/server) aliation and enables retrieval of listings from

guild nodes.

WAX Node

WAX Node is the “full node” that will be run by Guilds and other

ecosystem participants. A WAX Node is required to function as a

Guild and to allow bonding of Transfer Agents.

Additionally, a WAX Node provides a gateway to the overall WAX

Platform, including node and Guild discovery, API endpoints

for WAX Connect and WAX Wallet, and possibly a naming

service. Each WAX Node will hold a complete copy of the WAX

blockchain.

WAX Wallet

WAX Wallet allows non-guild WAX users to hold WAX Tokens

and participate as a DPOS delegate.

WAX Core

WAX Core will be an SDK that encapsulates the common functions of

WAX Node and WAX Wallet. WAX Core will enable forging of delegates,

provide blockchain synchronization, and include the complete developer

API. WAX Core is for those who intend to build on top of the WAX

Platform.

WAX Roadmap

WAX Token Sale

The total supply of WAX Tokens that will ever be created is

1,850,000,000. All WAX Tokens will be generated in a seed block and

distributed according to the chart below. The information provided

on token creation, process, allocation and use of sale proceeds is the

current plan, but is subject to change in WAX’s discretion.

Token Sale

64,750,000 WAX Tokens were sold in the WAX Token sale.

When WAX Tokens are issued, all contributors will receive

10x the number of tokens they purchased. The reason we’re

issuing 10x the tokens is because it will be more convenient

for users of the token. It will make microtransactions more

easily calculable, and since WAX was designed to facilitate the

millions of daily microtransactions for digital items, this is an

important feature to include for WAX users.

Market Development

30% of WAX Tokens were, or will be, issued to encourage new

developers to take part in the growing marketplace. These

tokens will be distributed to new developers and publishers to

incentivize them to release virtual goods that can be traded

on the WAX Platform. This provides a new indirect distribution

channel for game developers while allowing market demand

from the gaming community to shape games we love.

Contributers and Advisors

15% of WAX Tokens are, or will be, held by the early

contributors and advisors. This group has contributed 16,800

ETH to acquire 5,040,000 WAX Tokens. Some contributors

and advisors have received, or will also receive, free bonus

tokens for the advisory work they will be doing for WAX. These

tokens cannot be immediately transferred due to time-based

restrictions on their use.

WAX Team and Founders

20% of WAX Tokens are being, or will be, retained by WAX and reserved

for development, team, and founders who will continue to enhance the

WAX Platform with valuable updates and their use of these tokens will

also be time released.

Token Sale

35%

Market Development

30%

Contributors and

Advisors

15%

WAX Team and

Founders

20%

Token Sale Process

The WAX Token sale has concluded.

ERC20 WAX Tokens will be distributed to participants of the WAX Token

sale no later than December 29, 2017.

Use of Proceeds

Operational Overhead

35%

Software Development

35%

Market Development

30%

ETH received during the token sale will be immediately leveraged to

support WAX’s on-going development and operations.

Legal Requirements

Tokens, the blockchain and smart contracts are nascent technologies.

The application of existing laws to new technologies is often unclear.

The laws that may be implicated by the WAX Platform and tokens are

numerous given its worldwide reach. As a result, the legal and regulatory

issues surrounding the WAX Platform and tokens are complex and

undened at this time. As these issues are settled, modications may

need to be made to the WAX Platform and WAX tokens to comply with

applicable law.

Summary & Conclusion

Current online video game trading of virtual assets for Online Games and

other online gaming types is approximately $50 billion. OPSkins, the world’s

largest video game virtual goods trading marketplace with millions of

registered buyers and sellers, is developing WAX to expand virtual asset

trading. As Amazon is to physical goods, OPSkins is to virtual goods.

Amazon built the “Amazon Marketplace” allowing millions of entrepreneurs

to open up their own trading virtual store. Similarly, OPskins is building a

decentralized “WAX Platform” allowing millions of traders to create their

own virtual store, starting with thousands of gaming sites today in the

virtual goods ecosystem. With WAX, millions of individuals can create

new businesses based on their passion for video games offering buy, sell,

rent, or trade capabilities to their social networks, extending the market far

beyond what it is today.

Appendix A

WAX Use Case

32Appendix A

Appendix A: WAX Use Case

The way gamers interact with their games, and with others playing those games, has

evolved rapidly during recent years. Casual streaming services like Justin.tv have given

way to professional gamers, a new category of sporting called “esports,” and companies

looking to get a foothold in the online gaming world.

Given the global audience and the youth of their fan base, it’s no surprise that many

advertisers use esports sites like Twitch, Youtube Gaming, Smashcast, and Mirrativ to help

build their brands. These sites push the viewing experience a step further. Unlike traditional

sports broadcasting, they offer an interactive experience to visitors who spend money on

their favorite video games and other online experiences.

Imagine things from the point of view of the gamer.

He visits his favorite streaming site and interacts not only with the content but also with

other gamers. As he watches, he is also chatting with others. Comments y whenever

there is really great action or an incredible kill. Like many of his friends, he’ll be on the site

for several hours.

He notices that the players have some unique looking skins. Their guns have a beautiful

dragon design that he’s never seen before. He thinks, “Wow, I would love to have a skin like

that.”

Before WAX, he had to visit a centralized marketplace or engage in makeshift one-on-one

transactions to buy skins and other virtual goods. With WAX, though, getting new skins

is as easy as clicking on a listing widget that is easy for any site to implement and that

allows painless onboarding to the WAX Platform.

The widget, implemented as a simple set of tags that any site can deploy, is congured

to align with a specic Guild. Each game can have one or many Guilds, but no game can

be represented on the WAX Platform if it doesn’t have at least one Guild. Most of what a

Guild does - running a full WAX node and carrying out certain responsibilities to aid in the

functioning of the WAX Platform - is transparent to both the listing site (where the widget

appears) and the potential buyer.

The buyer has to know only that he is interested in virtual goods from a specic game and

the listing site simply congures the widget to offer items from that specic game. The

widget queries the WAX Platform to retrieve items from the global virtual goods database

that is maintained by the network of nodes in the platform. Using available information,

33Appendix A

the widget then chooses which item to display and the potential buyer can examine the

currently displayed item or page through and examine additional items all priced in WAX

Tokens.

Once the potential buyer decides to purchase, he simply selects “buy now” in the widget

and is presented with an authentication window. If this is the rst time he is interacting

with the WAX Platform, he’ll be taken through an onboarding process that creates an

identity, allocates a WAX Wallet, and allows him to fund the immediate purchase, all

without forcing him to understand WAX, the WAX Platform, or WAX Tokens. From the

buyer’s perspective, all that is required is to select an item, provide payment, and, a short

while later, the item shows up in his personal inventory without him ever leaving the site he

was visiting.

He is delighted with the experience. Buying skins before meant he had to go to a

centralized marketplace service like OPSkins. Going from streaming site to the various

fansites he regularly visits, he sees this same widget allowing anyone to search, browse

and buy virtual goods.

This ability to buy a virtual item anywhere at any time is what no one else provides today.

Appendix B

Marketplaces Create Wealth

35Appendix B

Appendix B: Marketplaces Create Wealth

The rise of the Internet has enabled digital marketplaces to generate hundreds of

billions of dollars of wealth for buyers and sellers using nine core principles to create the

ecosystem for growth and wealth creation where it would not otherwise exist.

Core Principle Analog Example Digital Example

Expanding distribution

from local and regional

markets to national and

global markets

The Silk Road connecting Far

East and Europe vs insular trade

created new markets and wealth

for many

Garage-sale and swap meet

entrepreneurs become powersellers

on Amazon; homeowner AirBnB hosts

selling to a global audience

Making money passively

with minimal effort

Income from parking lots or

Intellectual Property (IP) rights

Playing video games for a living

(eSports); using aliate marketing or

social graph to earn a living (inuencer)

Guaranteed settlement

to shift counterparty risk

when unknown parties

transact

Banks providing bank reserve

notes redeemable by anyone

(origin of currency)

Paypal or internal payment platforms to

remove payment risk

Seller or buyer reliability

Bias towards known brands and

creditless/cash purchase only

Reputation management rating

systems create identity history (Upwork,

BazaarVoice, etc.)

Cross-border

transaction settlement

Trade zones allowing for foreign

trade, foreign currency exchange

at banks

Central nance operations allow

international buyers and sellers in

e-commerce (Alibaba, eBay)

Fraud prevention

Know Your Customer (KYC) rules

at nance institutions, credit

applications

Expensive but necessary credit card /

payment fraud departments

Expanding supply;

increasing liquidity

Retailers consolidating inventory

(department stores) vs boutiques

Thousands of options in shape, size

& quality on eBay; millions of new

rideshare drivers

Speed of settlement;

price exibility to

increase demand as

needed

Shopping malls creating foot

trac, cash and carry, credit

cards, print advertising, coupons;

discount sales

Search engine optimization and other

digital with millions of buyers on Google

Play / App Store; Steam for video game

downloads; promotion codes

Algorithm-driven

platform

Guessing supply and demand,

clearance sales to move inventory,

discount stores; manual multi-

variant testing

Machine learning & a/b testing predict

supply & demand, create personalized

recommendations; arbitrage pricing

36Appendix B

Centralized Virtual Goods Marketplaces

OPSkins is the largest centralized virtual goods marketplaces using these core principles,

yet OPSkins is largely unknown outside the inner circles of serious game players. This

gargantuan marketplace for virtual goods for video games currently exceeds $23 billion

through exchanges and trading platforms. Experts estimate there is another $23 billion in

casual trading between players.

OPSkins has already built and scaled a highly successful centralized platform that

addresses the most challenging aspects of a well-functioning marketplace. Though only

three years old, OPSkins has millions of users with almost no churn, generating billions of

transactions and growing at a rate of 200,000 new registrations per month.

On its centralized trading platform, OPSkins has created trust and eliminated nearly 100%

of buyer fraud losses by creating digital settlement services. This has had the effect of

successfully shifting the fraud risk from individual sellers and buyers to OPSkins. Since

OPSkins collects at currency (local currencies such as US dollars, Euros, Chinese Yuan,

and many more), it must maintain extensive banking relationships and fraud mitigation

processes and personnel as well as disallow many trades from new account holders using

PayPal or credit cards in order to avoid excessive losses.

Constraints of Centralized Marketplaces

Because OPSkins and other virtual goods trading platforms are inherently centralized,

gamers interested in buying, selling, or trading goods cannot transact outside of the

platform in a peer-to-peer fashion with the same safety and eciency. Reasons include:

• The method for trade can differ dramatically between games without an automated API

• Liquidity is another major obstacle for gamers to operate their own trade sites

• Without a critical mass of buyers or sellers, buyers nd prices too high and don’t have

variety or sellers can’t sell quickly because there is not enough demand

Benets of Decentralized Marketplaces

Demand for a signicant increase in trading volumes of virtual goods exists, but is currently

restricted due to marketplace centralization on a few large platforms, including OPSkins.

OPSkins operates the largest virtual goods marketplace in the world; decentralizing

that marketplace would allow all sellers and buyers to set up storefronts to buy, sell

37Appendix B

and trade on a peer-to-peer basis. Paralleling the growth realized by small businesses

through participation on LinkedIn, Houzz, Upwork, etc., virtual goods trading is poised to

experience explosive growth.

Smart Contracts—computer protocols intended to facilitate, verify, or enforce the

negotiation or performance of a contract, typically on the Blockchain—are the optimal

technical solution to decentralize complex virtual goods trading platforms like OPSkins.

To decentralize Virtual Goods Marketplaces, WAX is implementing smart contracts to

establish and maintain an open system that millions of global users can access to build

their own peer-to-peer marketplaces. Using the marketplace principles it has already

applied, WAX will decentralize OPSkins to work seamlessly to enable billions of trades

between its members. This will also afford buyers, sellers, traders, and entrepreneurs the

ability to establish storefronts with a few clicks using the WAX Platform, thereby saving

signicant development dollars when publishing their goods.

By providing all the complexity of the marketplace services including settlement, fraud

prevention, scaled supply and demand, and cross border exchanges, WAX anticipates the

total market size will increase by $30 to $50 billion. This estimate is based on the fact

that the current market of nearly $50 billion is generated by 400+ million online players

in the trading ecosystem. These online players represent just 22% of the 1.8 billion

gamers worldwide. As virtual goods trading becomes easier and more game publishers

embrace it as a revenue stream and a value to their gaming community, the market will

subsequently grow.

The role of WAX as a virtual goods marketplace is to provide WAX Tokens to represent

ownership of virtual goods in decentralized exchanges. With this important shift in

structure, millions of buyers and sellers will have the power to use their social graphs

to buy and sell virtual goods effortlessly. WAX Tokens can support a variety of selling

structures to maximize liquidity, such as bidding, reserve bidding or xed price. The

cottage industry of buyers and sellers OPSkins currently serves will not have to develop

complex backend systems, but instead will use WAX Tokens to leverage the most

powerful aspects of the OPSkins asset exchange. WAX Tokens will enable a new

generation of virtual assets traders, similar to how modern marketplaces such as Alibaba,

Amazon, Uber, and Airbnb changed commerce for millions of small business owners and

created hundreds of billions of dollars of new value.

Appendix C

Virtual Goods Trading

39Appendix C

Appendix C: Virtual Goods Trading

Virtual goods are digital assets purchased for use in online communities or games.

OPSkins specializes in the enhancement of standard goods found in online games.

Though not all video games enable virtual goods trading between players, the most

forward thinking video game publishers have beneted greatly by allowing their in-game

trading economy to thrive. The largest single market of tradable assets are called “skins”

(also referred to as nishes) for Counter-Strike: Global Offensive (CS:GO). Skins are strictly

cosmetic and do not affect game play.

Virtual Goods Example: Item Skins

Currently the estimated market value for CS:GO skins trading is over $10 billion annually.

Skins adorn objects and players in the games with colorful designs. You can see skins on

weapons, masks, sunglasses, shoes, and many other goods.

In other major tradable games like the H1Z1 family (Just Survive and H1Z1: King of the

Kill), the options go further to include other special movements that do not affect game

play (dancing or hand movements).

The most famous game series that started the trading ecosystem was World of Warcraft

(WOW). In WOW, virtual gold pieces were acquired by “gold farming”

and created

marketplaces for buying and selling.

Virtual shotgun without skin Virtual shotgun with skin

3 https://en.wikipedia.org/wiki/Gold_farming

40Appendix C

With ever-increasing value per transaction, billions of virtual goods trades occur between

players. Some goods are only worth pennies, while others trade for thousands of US

dollars. However, in almost all goods trading, there is enormous friction during buying,

selling, and trading of virtual goods. The friction is due to the following key factors:

Key Factor Issue

Trust General distrust in the trading environment between unknown players

Fraud

High prevalence of stolen accounts (typically via hacking) and stolen

payment methods such as credit cards

Cost

Fiat-based (USD, Euros, Yuan, etc.) transactions are costly and

impractical for small amounts

Forex

Foreign exchange in cross-border transactions is typically complicated

or impossible

User Interface (UX)

Centralized control of the assets by game publishers or trading

platforms can slow down and complicate trading without proper high-

volume API’s in place

Liquidity Without sucient buyers and sellers, marketplaces simply don’t work

BTC, AlipayBTC, Alipay, Weixin Pay

BTC, PayPal, G2A,

Visa/Mc, Boa Compra

BTC, Skrill, Netteller,

Paysafe, Yandex,

WebMoney

3%19%29%49%

41Appendix C

The trust required for global acceptance of at currencies such as US dollars, Euros or

Chinese Yuan began with the presumption of reliability, centralized authority, and liquidity.

In the past few years, 400+ million players worldwide now regard digital virtual assets with

the same level of trust as the rest of the global population does in at currency. Millions

of players use the virtual goods as stored value. Some of the most popular games with

tradable assets include Dota 2 (103 million downloads), Team Fortress 2 (39 million

downloads) and Counter-Strike: Global Offensive (30 million downloads)

. Each garners a

sizable audience and together, these audiences would constitute the third largest country

in the world.

Within the world of game play and virtual goods during the

last few decades, 400+ million players worldwide now regard

digital virtual assets with the same level of trust as the rest of

the global population places in at currency. This audience in

aggregate would constitute one of the largest countries in

the world.

“

400 600 800 1,000 1,2000 200

China

India

Online Gamers

USA

Indonesia

Brazil

Pakistan

Nigeria

Bangladesh

Russia

1,384 million

1,318 million

400 million

325 million

261 million

207 million

197 million

188 million

162 million

146 million

4 https://www.statista.com/topics/2290/mmo-gaming/

42Appendix C

Through its virtual asset trading platform, www.opskins.com, OPSkins has created

trust and eliminated nearly 100% of fraud losses borne by the buyer by creating digital

settlement execution services. The fraud risk has shifted to OPSkins instead of individual

sellers/buyers. Because OPSkins collects at currency such as US dollars, Euros and

Chinese Yuan, it must maintain extensive banking relationships and fraud mitigation

departments as well as disallow many trades from new account holders using PayPal

or credit cards in order to avoid excessive losses. Because OPSkins and other trade

platforms are inherently centralized, gamers interested in buying, selling, or trading assets

cannot transact off-platform in a peer-to-peer fashion with the same safety and eciency.

The method for trade can differ dramatically between games without an automated API.

Liquidity is another major obstacle for gamers to operate their own trade sites. If there

is not critical mass of buyers and sellers, prices will be elevated and selection limited. In

addition, sales may lag due to a lack of demand.

The majority of virtual goods trading occurs for games published by Valve Software, maker

of the Steam

game distribution platform. Steam serves a community of 65 million gamers

worldwide. The top six publicly traded game companies have sizable audiences with 2017

revenue of $41 billion. In addition, Sony, Tencent, Microsoft, Nintendo, Activision Blizzard,

and EA use virtual assets

The market for these tradable assets is estimated at nearly $50 billion, half of which is

through platforms such as OPSkins and through informal interaction between gamers who

share social networks. Many of the 400 million world wide multi-player online video game

players seek to trade their skins for at and cryptocurrency such as Bitcoin and Ethereum.

Though cryptocurrency has a relatively small adoption pool for virtual goods trading

today, bitcoin and similar currencies are ideal to address cross border currency issues and

microtransactions

Because online video gaming is a global phenomenon, most trades occur between

players located in different countries. Accordingly, virtual asset trading users endure

high transaction costs (i.e. international payment processing fees and value lost through

currency conversion). Simply eliminating these cross border transaction costs between

the millions of virtual assets traded every day would be sucient economic justication

for WAX to exist. WAX will immediately benet the global community of virtual asset

traders by lowering costs to get the best prices for buyers and sellers. WAX would also

enable microtransactions that would otherwise be infeasible cross border.

WAX will provide the ability to buy, sell, or trade skins and other virtual assets in a peer-

5 http://www.valvesoftware.com/

6 https://en.wikipedia.org/wiki/Video_game_publisher

7 https://en.wikipedia.org/wiki/Microtransaction

43Appendix C

to-peer method that does not require a centralized party. WAX creators believe this

will expand the market considerably, allowing hundreds or thousands of online sites to

facilitate trades while also accessing a highly liquid marketplace, ensuring that prices

are fair and transactions occur quickly and at a low cost, especially across international

borders.

Disclaimer

This WAX white paper is for information purposes only. WAX does not

guarantee the accuracy of or the conclusions reached in this white paper,

and this white paper is provided “as is.” WAX does not make and expressly

disclaims all representations and warranties, express, implied, statutory

or otherwise, whatsoever, including, but not limited to: (i) warranties of

merchantability, tness for a particular purpose, suitability, usage, title or

non-infringement; (ii) that the contents of this white paper are free from

error; and (iii) that such contents will not infringe third-party rights. WAX

and its aliates shall have no liability for damages of any kind arising

out of the use, reference to, or reliance on this white paper or any of

the content contained herein, even if advised of the possibility of such

damages. In no event will WAX or its aliates be liable to any person or

entity for any damages, losses, liabilities, costs or expenses of any kind,

whether direct or indirect, consequential, compensatory, incidental, actual,

exemplary, punitive or special for the use of, reference to, or reliance on

this white paper or any of the content contained herein, including, without

limitation, any loss of business, revenues, prots, data, use, goodwill or

other intangible losses.

All references in this WAX white paper to the WAX platform, regardless of

tense, are intended to be references to how the WAX platform will operate

when it is fully operational. See the WAX roadmap on page 21 of this WAX

white paper for information about the expected development of the WAX

platform.