What is Raiden Network?

The Raiden network is envisioned as the Ethereum blockchain’s additional layer. An off-chain scaling solution for ERC20 tokens and their rising transaction demand. It proposes the usage of "Payment channels" (PCs) technology, ensuring near instant, low fee, secure transactions. PCs act as a blockchain based token escrow providing the proof of balance to exchanging parties. This allows token transactions without an on-chain record for each of them. Only the opening and closing of PCs are recorded on the blockchain and incur gas fees. Two users can transact by opening a bi-directional channel. The Raiden network's routing protocol conducts transfers outside the bi-directional channels. The RDN token is an incentive mechanism for the auxiliary services providers (full nodes, developers etc.). Users could pay the fees for better network experience. RDN's are also used for micropayments on µRaiden (Micro Raiden) network which is focused is on frequent unidirectional transactions.