ICO Review: Raiden Nework (RDN) – Scalable Transfers for Ethereum

Raiden is an off-chain payment network built on top of the Ethereum network.

Full report by Crush Crypto: https://crushcrypto.com/analysis-of-raiden-network/

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What does the company/project do?

Raiden is a payment network built on top of the Ethereum network. The goal of the Raiden project is to provide an easy to use conduit for off-chain (i.e. not on the Ethereum blockchain) payments without the need of trust among the involved parties.

This is done by broadcasting transactions on the blockchain only during settlements, and not at each individual transaction between the two parties.

It works similarly to a bar tab, in that you only pay the total to the bar when you are done for the day, instead of going through the whole payment process each time you purchase a drink. Each “bar tab” is called a channel.

By using off-chain payment channels instead of settling on the blockchain for each transaction, parties in a channel can send money or tokens back and forth nearly instantly, in high volume, and without fees until settling the net amount on the Ethereum blockchain when the parties decide to close the channel.
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What are the tokens used for and how can token holders make money?

Protocol level fees are necessary to keep the payment channel network balanced. Nodes will use fees to prevent their channels from being depleted over time. These fees will be comparatively small and be denominated in the token that is transferred in the channel.

Peripheral fees will be payable to services in the network that, for example, assist with finding a path with sufficient capacity or services that provide channel monitoring services for offline users. Users running these services themselves will not need to pay these fees but can earn them instead.

The Raiden team expects that over 95% of all nodes on the network will be light-clients who are happy to pay tiny fees for the convenience of not having to run the full stack of services. It is expected that most dApps will use a light client, so Raiden transactions via those dApps will incur a fee that is payable in RDN tokens.

As most users will not run a full node, they will need to pay RDN to participate in the Raiden network. Therefore, the more usage the Raiden network has, the more valuable RDN tokens should be.
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Opportunities

– Since it is a highly anticipated project, the Raiden Network will probably have large usage right off the bat. Very few ICOs can claim to do the same.
– This project moves Ethereum forward in helping to solve the scaling issue. The use case of Ethereum can be greatly expanded with the introduction of Raiden.
– Network effect is present. The more people use the Raiden Network, the more channels there are, and the more efficient the network will be. If the Raiden Network becomes very large, potentially the vast majority of the Ethereum transactions can be shifted off-chain, making Raiden Network very valuable.
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Concerns

– The project has been delayed by over half a year – we are not sure when it will actually be finished and rolled out.
– Raiden Network is more useful in some cases than others. It is not intended to support large value transfers, for example.
– If other similar scaling solutions are developed, users may prefer to use other solutions that don’t charge a fee.
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Disclaimer

The information in this video is for educational purposes only and is not investment advice. Please do your own research before making any investment decisions. Cryptocurrency investments are volatile and high risk in nature. Don’t invest more than what you can afford to lose. Crush Crypto makes no representations, warranties, or assurances as to the accuracy, currency or completeness of the content contained in this video or any sites linked to or from this video.

ICO Review: Raiden Nework (RDN) – Scalable Transfers for Ethereum

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Kane Dane