The type of paint base you use depends on the time you have to complete the project, durability required, color appearance, and your method of application.
Oil-based paints are the most popular because they are more durable, opaque, penetrating, and are used for multiple color applications more often. That is because oil-based paints penetrate into the textured surface you create after sandcarving. Wine bottles, mugs, metal, wood, the backside of mirrors, glass, etc., are common substrates you would use oil-based enamels for. These paints can have a longer cure time than water-based paints and are not as easily found at paint stores. This paint is applied with the mask still on the substrate. Whites and reds are often better with oil-based paints.
Water-based paints, however, are used most often because of the ease of use and application method. They dry quickly (about 10 minutes) and are an easy clean up. They usually require multiple layers of paint to get an opaque look and the paint may flake off in some applications. This paint is applied with the mask still on your substrate. If you choose chrome, gold, metallic, or silver colors, the water-based paints should be fine.
Wax-based paints would be your Rub ‘N Buff paste. This is easily applied to your sandcarved area with a terry cloth with no mask on your substrate. This dries in less than a minute.
-Darin Jones, IKONICS Imaging