Waveshaper can be used for distortion and shaping the waveform of the signal.
The graph represents the amplitude of the signal on a linear 0-1 scale. The X axis represents input amplitude, and the Y axis represents output amplitude. A straight diagonal line represents no change to the signal. Drawing on the wavegraph changes the shape of the signal directly.
The input and output knobs control gain of the signal that is applied pre- and post-processing.
The clip input light, when enabled, clips the input signal to 1 (0dBV) amplitude before processing. If the clip is disabled, then amplitudes above 1 will be modified by the ratio of the endpoint (right end) of the graph: if the end of the graph is at 0.5, then all amplitudes above 1 will be multiplied by 0.5. This happens before post-amplification.