Wax-based coloured pencils use wax as a binder to shape powdered pigments (colour) into a solid thin cylindrical core. Oil-based coloured pencils use oil with a touch of wax as the binder. The majority of coloured pencils are wax-based because the core is versatile and can accommodate more textures, sizes, and pigments.
Wax-based pencils have a buttery consistency and go on paper smoothly. They are softer, lighter, and easier to blend, layer, and mix; however, the softer core breaks easily. Wax-based pencils are less durable and do not hold a fine point for long. Unless a fixative is used, the wax tends to rise to the top over time and create a haze-like film; this is called the wax bloom.
Oil-based pencils are considered premium because they deliver a more professional look and finish. They are less buttery than wax-based pencils but tend to lay down more colour. The increased coverage reduces the number of layers required for depth of colour. The harder core is more durable and holds a fine point longer for intricate work. Fixatives are not required because there is no wax bloom.