So waves is an exchange and also allows for ICOs to be performed somewhat like Ethereum.
... but What exactly is the Waves token used for?
Waves is a decentralized platform, in the same sense as Bitcoin, blockchain where different kinds of transactions can occur. Imagine you have a token on ETH platform and would like to move this token to BTC colored coins. It would be great to have a protocol for this. So we will try also to create a protocol for token/asset transfer between blockchains.
The Waves platform also provides a crowdfunding solution through its lite client wallet.