ICO Review: Raiden Network (RDN)

Transcription

1 ICO Review: Raiden Network (RDN) Scalable Transfers for Ethereum October 10, 2017

2 What is Raiden Network? Raiden is an payment network built on top of the Ethereum network. PAYMENT CHANNEL NETWORK It aims to provide an easy to use conduit for trustless off-chain payments. Ethereum s version of Bitcoin s Lightning Network. Transactions are broadcasted on the blockchain only during settlements, and not at each individual transaction. 2

3 Key features and limitations Key features Scalable: Scales linearly with the number of participants Fast: Transfers are confirmed and final within a fraction of a second Confidential: Single transfers don t show up in the global shared ledger Interoperable: Works with any token that follows Ethereum s standardized token API Low fees: Transactions can be 7 orders of magnitude lower than on the blockchain Micro-payments: Low transaction fees allow tiny values to be efficiently transferred. Limitations Not suitable for large value transfers due to extra cost of channel lifetime management 3

4 Main use cases For Raiden Network µraiden PAYWALL DEMO Retail payments, P2P cash, micropayments, and instant token swaps. For µraiden (available on Ropsten testnet) IoT markets with the possibility of per-use charging Pay-per-use basis to decide whether to endure ads or pay for a premium experience. 4

5 Developer preview 5

6 Developer preview 6

7 Milestones Project has been under development since at least September 2015 (per GitHub). MILESTONES ON GITHUB (OPEN) A simpler version of Raiden called µraiden is currently being deployed in the Ropsten testnet. The project has been delayed for a while (original MVP launch date was March 2017). 7

8 RDN token sale summary ICO SUMMARY UNIFORM PRICE DUTCH AUCTION Project name: Raiden Network Token symbol: RDN Website: Hard cap: Undetermined due to nature of Dutch auction (public crowdsale ICO contributors own 50% of total token supply) Total supply: 100 million RDN Max market cap at ICO (fully diluted): Undetermined due to nature of Dutch auction Presale or white list: None ERC20 token: Yes Bonus structure: None Timeline: Tentatively October 16, 2017 Token distribution: 1 week after the end of ICO 8

9 Use of RDN tokens There are two kinds of fees in the Raiden Network. 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. Over 95% of all nodes are expected to be light-clients willing to pay small fees for the convenience of not having to run a full stack of services. As most users will not run a full node, they will need to pay RDN to participate in the Raiden network. 9

10 THE TEAM Who are the people behind Raiden Network? BRAINBOT PROJECTS Raiden Network Scalability & Confidentiality for Ethereum Heiko Hees Founder & CEO at brainbot technologies He has been with Brainbot for over 17 years and a core developer of Ethereum since March raidex The Decentralized Exchange Trustlines Network People Powered Money Hydrachain Permissioned Distributed Ledger based on Ethereum 10

11 OUR THOUGHTS The opportunities Since it is a highly anticipated project, the Raiden Network will probably have high demand/usage. 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. The network effect is present. The more people use the Raiden Network, the more channels and the more efficient the network will be. If Raiden Network is successful, the vast majority of Ethereum transactions could be shifted off-chain. 11

12 OUR THOUGHTS Our concerns The project has been delayed by over half a year we are not sure when it will be finished and launched. 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 opt to use other solutions that don t charge a fee. 12

13 OUR THOUGHTS Other scaling solutions for Ethereum Upgrade Description Type Increase gas limit Parallel process transactions Swap virtual machines Proof of stake Payment channel networks Truebit Plasma Sharding Scaling Improvement # known people working on it Miners increase gas limit On chain 2-8x 2-10 Transactions can be processed by nodes simultaneously instead of one by one Swapping the Ethereum virtual machine (EVM) for web assembly (WASM) Changing consensus algorithm from proof of work to proof of stake Parties exchange signed transactions off chain, allowing infinite transactions with only an initial & closing transaction on chain Off-chain smart contract execution through a verification game with dispute resolution Tree hierarchy of blockchains where only fraud proofs are reported up the tree Validators only need validate some, not all, of the network's transactions Status Waiting for miner adoption Optimistic Launch Date mid 2017 On chain 2-8x 1-3 Concept late 2017 On chain 3-10x 1-2 Code in progress 2018 On chain 2-5x 3-5 Code in progress late 2018 Off chain x+ 4-8 Code in progress 2018 Off chain x+ 2-5 Concept 2018 On chain x+ 2-5 Concept 2019 On chain x+ -- Unlikely before proof of stake 2019 Fred Ehrsam. "Scaling Ethereum to Billions of Users Fred Ehrsam Medium." Medium. 27 Jun Web. 9 Oct < 13

14 OUR THOUGHTS What do we recommend? For flipping: Neutral. The Dutch auction format will prevent any unmet demand by design, which makes this project not a suitable flipping candidate. For long-term holding: N/A. RDN tokens could become one of the top 10 most valuable tokens because of expected heavy usage. RDN tokens may offer sufficient long term upside when the total funds raised is below $75M (equivalent to a fully diluted market cap of $150M). 14

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