If an activated ability or triggered ability has an effect that depends on your devotion to a color, you count the number of mana symbols of that color among the mana costs of permanents you control as the ability resolves. The permanent with that ability will be counted if it's still on the battlefield at that time.

Mana symbols in the text boxes of permanents you control don't count toward your devotion to any color.

Use your devotion to blue as the triggered ability resolves to determine how many tokens are put onto the battlefield. If Master of Waves is still on the battlefield at that time, its mana cost will count toward your devotion to blue.

Hybrid mana symbols, monocolored hybrid mana symbols, and Phyrexian mana symbols do count toward your devotion to their color(s).

Numeric mana symbols ({0}, {1}, and so on) in mana costs of permanents you control don't count toward your devotion to any color.

If Master of Waves leaves the battlefield, and nothing else is raising the toughness of the Elemental tokens above 0, the Elemental tokens will die and subsequently cease to exist.

Barring other effects, the Elemental tokens will enter the battlefield as 2/1 creatures.