A waterslide decal soaks in water for a few seconds until its printed film releases from the backing paper, then slides into place on the model. Once dry — helped by setting solution — the film is thin enough to vanish under a topcoat.
They are the professional standard because they conform: with softer solution, a waterslide will snuggle down into panel lines and over curves. The failure mode is silvering — trapped air under the film — prevented by applying onto a gloss surface.
See it in context in our panel lining & decals guides, or explore the tools hands-on in The Bench.