How does trading WLS on exchanges actually work, and why, in theory, trust is more important than a public full node.
WLS as a coin, only lives within the Whaleshares Blockchain. New WLS coins are generated with every block that is produced on the Blockchain, and never leave the chain. You can send it to another account on the blockchain, you can tip posts and comments with it, you can stake it, you can even burn it, but all those actions take place on the Whaleshares Blockchain.
How does WLS get to an Exchange?
It doesn't. What happens is, on the exchange system, new coins are created with sort of the same name. The creator of this alternative version of WLS grants they will peg 1 WLS with 1 alternative WLS coin, and vice versa.
The Steps taken to land your WLS on an exchange
Exchange systems have a regular Whaleshares account they use to collect and distribute WLS. Let's say you want to use Rudex to exchange your WLS to Rudex.BTS or GPH.
- Step 1: You send 6,000 WLS to the Whaleshares @rudex account, stating your gphid in the memo and you are done
- Step 2: Rudex notices a deposit of 6,000 WLS to their Whaleshares account. They now need to take action on their own system.
- Step 3: Rudex mints 6,000 Rudex.WLS (the alternative version of WLS), and sends those to your Rudex/Bitshares account
After these steps have been taking your initial 6,000 WLS is still present in the @rudex account on the Whalesharesplatform, while at the same time, the same amount of alternative WLS is present on the Rudex exchange.
The steps taken to bring your Rudex.WLS back to the Whaleshares platform
Let's go the other way around. You buy some Rudex.WLS on Rudex Exchange and want to move it to your Whaleshares account.
- Step 1: You send 7,000 Rudex.WLS to the rudex account in the Rudex system, stating your Whaleshares account in the memo and you are done.
- Step 2: Rudex notices the deposit of your Rudex.WLS. They burn the Rudex.WLS, and then need to take action on the Whaleshares platform
- Step 3: They send 7,000 WLS from their Whaleshares @rudex account to your Whaleshares account
NOTE: the above doesn't take in account minimum amounts and fees. When using Rudex, always use their interface to initiate the transaction.
Trust the Exchange
You may have noticed in the above scenarios, you have to trust the Exchange. Not only for processing your orders, but also for keeping the funds, to send coins back and forth, available.
What would happen if Rudex used the liquid WLS, they hold from deposits to their Exchange, in other ways? That could mean that after you bought some Rudex.WLS they will not have the funds to send WLS to your Whaleshares account. It is not likely they will do that, but it is a risk you need to be aware of for all WLS Exchange systems.
Where does the Full Node come in?
The full node connection is used to automate the process. Notifications of deposits on either accounts are picked up by a script, the script will check the transaction and perform the next steps needed on either platform.
In theory, a full node is not needed. In practice a full node makes things work smoother. A script, obviously, never sleeps. But as shown above, it is not impossible to run an exchange service without it. Having exchanges run their own full node instead of depending on a public full node is also an option.
Current Ways to buy/sell WLS
|Service||Paired with||Minimum Amount||Fees|
|Ionomy||BTC||-||Deposit: 0 WLS Withdrawal: 1 WLS|
|Rudex||BTS and GPH||5K||Deposit: 0 WLS Withdrawal: 2k WLS|
|Wlslink||Hive||-||Deposit 3% Withdrawal: 3%|
|Goofies||Hive||-||Deposit 1% Withdrawal 1% Withdrawal to Stake 0%|
Contribute to the Whaleshares project in fields that interest you most,
- If you want to see more posts, publish more posts
- If you want to see more comments, add more comments
- If you want to see more or higher tips, go for it
- If you want to see more activity on the exchanges, the floor is yours
We can only make this work, together.