Wanchain and its WAN token: A starter’s guide
Wanchain is creating a distributed infrastructure for digital assets that will act as a bridge between different blockchains and a be platform for financial services.
Wanchain: Need to know
Wanchain is a fork of Ethereum that adds privacy features and a cross-chain protocol that makes it possible to swap assets between otherwise isolated blockchains. It foresees use cases such as decentralized exchanges, asset management tools, digital asset issuance (ICOs and token offerings), payments and lending applications, among others.
Research began on Wanchain in 2016, with the white paper published in 2017. The ICO was held in October 2017 and raised about $36 million, meeting their funding goal.
The founder of Wanchain is Jack Lu, a graduate of Chinese and American universities, who worked as a software architect at several American companies, including Xerox and Hewlett-Packard. He co-founded another blockchain company called Factom before founding Wanchain.
The President of Wanchain, Dustin Byington, graduated from Columbia University and the University of Michigan and worked for Goldman Sachs and founded several companies in the blockchain space. The website lists 36 other team members, many from China, as well as more than 10 advisors.
Wanchain is part of the Blockchain Interoperability Alliance along with ICON and Aion.
How does Wanchain work?
Since it uses the code of Ethereum, Wanchain has many of the same features as that blockchain, such as running dApps and smart contracts. What distinguishes Wanchain from Ethereum is its cross-chain protocol, which will enable transactions between Wanchain and other public and private blockchains, and privacy features. Wanchain’s roadmap foresees integrating Ethereum and Bitcoin by the end of 2018, and then other blockchains after that.
Wanchain uses verification nodes to implement cross-chain transactions. If Alice wants to move 10 ether from Ethereum to Wanchain, she first transfers it to a special locked account on the Ethereum network held by Wanchain. At the same time, a cross-chain transfer request is sent to Wanchain network, where a verification node confirms that the ether is in the locked account.
Once confirmed, new tokens which correspond to the 10 ether are created on Wanchain. After this, the ether is effectively on the Wanchain network and can be used for any purpose there. When Alice wants her ether back, Wanchain unlocks the Ethereum account and moves the funds back to Alice’s original wallet.
The protocol works by using what is called the Locked Account Generation Scheme. This system breaks into pieces the private keys needed for locked accounts and distributes them to various nodes. It reduces the risk of losing private keys while keeping the system stable and secure. Fees are paid to the nodes to incentivize accuracy.
Another difference between Wanchain and Ethereum is that Wanchain has added privacy features, which are ring signatures and one-time address generation. These work by making it difficult for third parties to determine who is signing transactions and where assets are going.
Wanchain token (WAN) and Wallet
Wancoin (WAN) is the native token of Wanchain. Transactions consume a certain amount of WAN, and it is also used in security deposits for the cross-chain verification nodes. There are 210 million WAN in total, with 107.1 million, or 51 percent, sold to the public during the token sale. A wallet was made available for download on Github. Wanchain is also working on Ledger support for WAN tokens.
How to buy Wanchain
Wanchain can be purchased on the cryptocurrency exchange site, Binance.
WAN was originally issued as ERC20 tokens, with the understanding that these tokens would be swapped at a 1:1 ratio for native WAN tokens after the launch of the Wanchain mainnet, which occurred in late January.
As of the end of March, 94 percent of the ERC20 tokens had been converted to native WAN tokens, and users holding ERC20 tokens are still able to swap them. There were reports that some users had acquired WAN ERC20 tokens on EtherDelta after the ICO, but Wanchain has said these tokens will not be accepted for swaps.
As of the end of March 2018, 94 percent of the ERC20 tokens had been converted to native WAN tokens, and users holding ERC20 tokens are still able to swap them. There were reports that some users had acquired WAN ERC20 tokens on EtherDelta after the ICO, but Wanchain has said these tokens will not be accepted for swaps.
The Wanchain ICO, which was held on Oct. 3-4, 2017, met 100 percent of its target funding with about $36 million raised.
Wanchain ICO price
WAN tokens sold for around $.34, or 0.00114 ETH during the token sale. Since hitting the exchanges at the end of March, WAN has been trading at between $3-4 each.
Wanchain plans to use the raised funds for the following purposes:
- 60 percent for research and development
- 10 percent for community development
- 10 percent for marketing
- 10 percent for infrastructure
- 10 percent for daily operations
Wanchain social media
Wanchain uses multiple social media channels to communicate its message. It has a Medium blog, a YouTube channel with 2,600 subscribers, a Telegram group with around 50,000 subscribers, a Twitter page with around 94,000 followers, a Reddit group with 15,500 readers, and a Facebook page with nearly 18,000 followers and 15,800 likes. They appear to be fairly active, on average posting in one the channels at least once every few days.
Wanchain has several strengths, including an experienced team with relevant industry experience and some product development completed. They have managed to successfully raise funds and market themselves to gain a sizeable amount of crypto media attention. Wancoin is listed on Binance and has performed relatively well in markets.
However, there are yet many challenges. First, there are several other projects working on cross-chain protocols, including Polkadot, Cosmos, and Interledger. Any of those projects gaining widespread adoption could sideline Wanchain.
Additionally, many of the use cases Wanchain proposes, such as lending, supply chain finance or digital asset derivatives, are speculative at this point. Delivering financial services using blockchain technology will likely require Wanchain to obtain regulatory approval in multiple jurisdictions as well as the adoption of their technology by established financial institutions.
The many connections between Wanchain’s team and China could also create political issues that may cause difficulties in gaining adoption in other countries.
Wanchain also has a great deal of development work to do, as they haven’t yet connected to any other blockchains. It remains to be seen how well their protocol will actually work in practice and whether they will be able to scale and quickly integrate with other blockchains. Also, there is a debate on the relative advantages and disadvantages proof-of-stake versus proof-of-work.
Wanchain final thoughts
Providing financial services is a possible use case of blockchain technology, but it faces many regulatory hurdles and established competition. Additionally, Wanchain’s cross-chain protocol still needs to be built and it’s unclear whether their technology will succeed over competitors. Wanchain is a speculative enterprise and it remains to be seen whether it will reach its goal of becoming a “distributed super-financial market.”