Launched in 2016, the Waves project has developed into an ecosystem that consists of a platform for the creation of custom tokens, a smart contract layer and a decentralized exchange, Waves DEX. Waves is built on the Leased Proof-of-Stake (LPoS) consensus model.
At the core of the Waves platform is an architecture with two distinctive features, a two tier architecture and the Leased Proof of Stake consensus model.
The two-tier architecture is designed to deal with potential scalability-related problems and consist of lightweight and full nodes, that keep the Waves blockchain running. To confirm transactions, the lightweight nodes rely on the full nodes.
This basically means that the lightweight nodes aren’t required to download the complete blockchain history, but work with the current network state. This state is used to run simpler procedures that are related to verifying payments on the blockchain.
The Leased Proof-of-Stake (LPoS) consensus model is a variation of the Proof of Stake model. Waves token holders can opt to lease their tokens to full nodes, at a rate of 0.002 WAVES per lease. A full node can be set up for a total of 1,000 WAVES tokens.
Token holders can also lease their tokens to a mining pool if they don’t have the required 1,000 WAVES tokens to set up a full node.