Coloured pencils are made using wax or a combination of wax and oil as a binder to shape powdered pigments (colour) into a solid thin cylindrical core. The majority of coloured pencils are wax-based because the core is versatile and can accommodate more textures, sizes, and pigments. Artist-grade coloured pencils - compared to student-grade - have higher pigment loading and are lightfast, which means they would not fade over time when exposed to daylight.
Wax-based pencils have a buttery consistency and go on paper smoothly. They have a soft core that is good for blending and layering; 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 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 and detailed work. Fixatives are not required because there is no wax bloom.