WAX CEO William Quigley: ‘Ethereum is just slow, difficult, and expensive’

Coin Rivet recently sat down to speak with Worldwide Asset eXchange (WAX) and OPSKins CEO William Quigley to discuss WAX’s consensus mechanism, the problems with Ethereum, and tensions with Steam.

William has an extensive background in both the consumer and cryptocurrency markets. He previously worked at Disney before co-founding popular stablecoin Tether. He was also one of the biggest investors in Ethereum’s initial coin offering (ICO) before more recently becoming the CEO of OPSkins and WAX.

‘The only chain I was comfortable with was a DPoS-based chain’

William claims WAX’s decision to move away from Ethereum – which uses a Proof-of-Work (PoW) consensus mechanism – was because the company’s biggest focus is on scalability. As such, he wanted to switch to a Delegated Proof-of-Stake (DPoS) consensus mechanism instead.

“The only chain I was comfortable with was a DPoS-based chain because otherwise you have massive amounts of costs and you get the congestion that is typical with PoW,” he says.

“The way Ethereum works is that it uses surge pricing – like Uber – and you don’t know when it’s going to surge.

“While I was an investor in Ethereum – my partners and I were the second biggest buyers of Ethereum – we’ve come to believe that Ethereum is a nice platform for testing smart contracts, intelligent operations in a blockchain – but it’s not a scalable platform.”

He references Ethereum’s transaction volume and how EOS – which has been around for roughly four years less – has “probably five times the volume already, and that’s because of DPoS”.

William concedes that nothing is perfect. DPoS-based chains are more complex to run and need to be constantly monitored. Trying to achieve these factors in a decentralised framework can be challenging, but “the alternative is you can’t run a scalable business”.

WAX borrowed the idea of running a DPoS chain from EOS. After building out its own chain, it became apparent the trickiest area to get right was the issue of governance.

When EOS launched, some of its senior leadership left and formed a new company which focused on targeting enterprise customers with an EOS-like solution.

“I know those guys, and I said if you had to do it a second time, what would you change?”

‘We have put a lot of attention on a layer above the blockchain’

It soon became apparent to the EOS community and studios who were building on EOS that they would be able to port their creations to WAX.

“WAX is going to be much bigger from a user and transaction count. We’re going to be bigger because we’re porting our transactions from OPSkins,” William reveals.

“We’re pretty confident that we’ll have a much bigger user base than many of the blockchains. And frankly, the reason I say that is because we’ve put a lot of attention on a layer above the blockchain, called the service layer.”

The service layer will be an API infrastructure that allows a decentralised application (dApp), customer, or game to easily interact with the blockchain.

“As you probably know, one of the biggest hurdles in blockchains being widely used is that they’re very difficult to integrate with.

“We thought well, we’ll just apply some of the things we’ve learnt from traditional technology building where you put an abstract layer above the difficulty layer, so everyone can use it.

“No one wants to figure out how to directly connect to the internet. They want to use a browser that connects to an e-commerce site.”

Other solutions exist in the market already, such as MetaMask or Scatter. However, they are not easy to use like a browser. Instead, WAX will utilise methods similar to logging in with your credentials on Facebook, Steam, or Google.

“We want to make it as though you’re using a regular app,” William adds.

‘Ethereum is just slow, difficult, and expensive’ 

WAX launched its mainnet recently, a move which William describes as “anti-climatic, in the sense that we were using earlier versions of that blockchain and stress testing it for six months”.

“I think we have four block producers. You need 21 – that’s the mandate for the DPoS consensus mechanism.”

Each of these block producers validates a transaction. Those 21 producers are then compensated with WAX tokens.

However, as with any aspect that relates to voting, there is always controversy when it comes to picking the validators.

“I think they (EOS) made a very big mistake in that they ask the token holders to vote for who should be a block producer.

“Ostensibly, that seems fine. The problem is there is a small group of token holders who have a lot of tokens and can decide who becomes a block producer.

“The rumour is they sometimes cut deals where they get compensated for voting for these block producers – I think it’s a really good idea to compensate voters, but not for voting for a specific block producer.”

Another key issue lies in the fact that choosing between potentially hundreds of candidates requires a significant amount of time that essentially equates to a full-time job.

To address this issue, WAX has devised the concept of an inspector general, and it is the role of the inspector general’s office to create a scoring mechanism that is objective.

There will be three people rotating as inspector generals on a full-time basis, and they will publish a report – William hopes monthly – outlining their scores on the candidates.

William claims that the concept gained universal support, in particular from the EOS community.

The problem now is working out who decides who becomes an inspector general.

“It’s always this hot potato, and we’re working on that right now with block producer candidates who would decide who this independent inspector general is,” continues William.

“However, I will tell you it’s night and day building and running a DPoS chain versus doing it on Ethereum.

“Ethereum is just difficult, slow, and expensive. Going to a DPoS chain made my developers much happier.”

‘I think it’s because it was competitive with Steam’ 

The plan is to port all OPSkins transactions over to WAX in the future. OPSkins has roughly two million purchases per week, meaning there could be up to two million transactions added to WAX every week.

OPSkins previously facilitated the trading of in-game skins on Steam before the platform ultimately made decisions that inhibited OPSkin’s business.

OPSkins took a commission on every traded item, but Valve – the creators of Steam – made the decision to restrict trades to every seven days, when some of these trades were happening multiple times per day.

This was back in March 2018 – not long after WAX had completed its ICO. Originally, William and his team were going to wait for a year before really getting into the video game side of the business. But with Steam’s decision made, they opted to accelerate their ideas.

“We decided to get our own platform with our own virtual items within 90 days, and we did do that,” says William.

“Valve, initially, were sort of looking at what we were doing and eventually they sent us a little note saying ‘hey, we don’t like what you’re doing with WAX’ – and I think it’s because it was competitive with Steam and they were like, we’d prefer it if you’d stop this.

“So, we were like this is the future, so no. We’re going to do it. In June, they removed our API access, which we were of course expecting.”

William explains how big game development studios are hesitant to allow their in-game assets to be traded outside of their ecosystems for fear of losing revenue, despite there being a lot of interest and enthusiasm surrounding the concept of skins trading.

“I think if you’re a blockchain-based platform and you think you’re going to convince big companies to sell their items outside of their ecosystem – you’re going to be waiting a long time.

“I wish they’d listen to me (the big game development studios). The games thrive when consumers and gamers can trade their virtual items.

“The people who will push this concept are brand new studios, and eventually enough players will get used to this concept that they’ll start demanding it from the big companies – but until then it’s going to be small dApps, small video games slugging it out.

“I mean, I came from Disney, I’m a consumer guy, and so I always wonder how a guy like me ended up with blockchain, which is probably the least consumer thing ever, right?

“But hey, at least I can say what people need.”