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It would have to be not just decentralized - but federated in the same way that, say, email is. User is identified as user@facebook.com, or so forth, and other social networks could add said user as a connection to someone on their network (and vice versa) via an API.

Could wave/xmmp be used as an underlying protocol for this?

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Xmpp is federated like email: you have a unique identifier like your email address, belonging to the same domain as your xmpp provider. It is callled JabberID or jid and it (almost) looks like an email address and in case of gtalk, it is your gmail address.

So the answer is yes, xmpp (or wave as an extension of it) technically can be used for IM federation, because that's one of the goal of it. But I think the big social networks like to keep their users inside their walled gardens, and rather not let them communicate with users of other networks. Let's hope this will change.

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