The Waves blockchain is designed to enable users to create and launch custom crypto tokens. 

Waves allows for the creation and trade of crypto tokens without the need for extensive smart contract programming. Rather, tokens can be created and managed via scripts that run in user accounts on the Waves blockchain. 

The idea is that the development of new tokens (and the applications that govern them) should not substantially differ from launching a traditional web application. 

Toward this goal, programs and applications run as attachments to these transactions, and new assets are given a unique identifier. Scripts can only be attached at the creation of the asset.

These assets are designed to trade within the Waves ecosystem, which includes its own built-in decentralized exchange (Waves Exchange), made to facilitate trade between tokens created on the Waves blockchain with other WAVES tokens. 

In 2018, the Waves team added smart contract functionality to the Waves MainNet, enabling third parties to build decentralized applications (Dapps). Further, in 2019, the team behind the platform began to market Waves Enterprise, a version of the network designed for institutions. 

How do Waves work?

The Waves blockchain allows two different types of nodes to run its software: full nodes and lightweight nodes.

Full nodes keep a complete history of the transactions, while lightweight nodes depend on full nodes for transaction confirmation and interactions within the network.

To keep its distributed network in sync, Waves uses a variation of the proof-of-stake (PoS) consensus mechanism called leased proof-of-stake (LPoS).

The Waves LPoS Blockchain

In a traditional proof-of-stake model, any node that chooses to lock up tokens can be eligible to add blocks to the blockchain. The chances that a node will be able to add a block generally increase or decrease depending on the number of coins a node has locked in a special contract.

With the LPoS, nodes also have the option to lease their balance to full nodes.

This means that when a full node is selected to produce the next block and is compensated, nodes that lease tokens to that selected node earn a certain percentage of the payout.

Waves-NG

The protocol that determines which node gets the right to produce the next block is called Waves-NG, and it is a modification of an idea first proposed (but rejected) for Bitcoin (BTC).

Waves-NG breaks up the Waves blockchain into two kinds of blocks – ”key blocks” and “micro blocks.” Key blocks are created by a randomly chosen proof-of-stake miner. A public key in this block is then used by other nodes to create many microblocks which include transactions.

Smart Assets

Central to the Waves blockchain is the ability to create ‘Smart Assets,’ tokens with an attached script written in Ride, a programming language native to Waves. Any token can be given functionalities by attaching a script. The execution of the scripts costs 0.004 WAVES.

Since Waves enables users to issue tokens without any programming experience, the tokens and subsequent transfers are done as attachments added to transactions.

Different transaction types are introduced through plug-ins that are installed as extensions on top of the blockchain.

Source: https://www.kraken.com/learn/what-is-waves/