Ethereum is close to achieving one of the most critical architectural upgrades thanks to the successful implementation of Raiden Network, a solution that promises to solve the problem of network scalability by significantly increasing the number of processed transactions per second.
Raiden: Lightning Network for Ethereum
Raiden Network is very similar to Bitcoin’s Lightning Network. In concept, two users establish a payment channel that allows them to perform an infinite number of off-chain transactions that do not interact with the blockchain until the closing of that channel, in which the funds are distributed between the two peers according to the last balance cryptographically signed by the participants.
In this way, an infinite number of transactions would appear as two movements in the blockchain corresponding to the creation and closing of the channel, which ensures the transparency of the movements, avoiding potential double spending.
Likewise, it is important to note that it is not mandatory to establish a payment channel with each user, since the network automatically reroutes the funds to third parties through a network of payment channels. In this way, the more people participate, the more efficient Raiden will be. Something entirely different from the current situation where a high number of users has congested the blockchain.
Ethereum Could Soon Handle Over 1Million Transactions Per Second
The Raiden team assures that once fully deployed, this solution could process about 1 Million Transactions per second when combined with sharding and plasma. A figure much higher than the 15 tps that are currently handled in Ethereum and even significantly higher than the 65000 tps that represent Visa’s maximum theoretical network capacity.
To illustrate this technological leap, Vitalik Buterin spoke about the complementarity of layers 1 and layer 2 solutions in an In a May 30th OmiseGO AMA on YouTube:
“The reason I think layer 1 and layer 2 [networks] are complementary is because ultimately, if you look at the math, the scalability gains from the layer 1 improvements and layer 2 improvements do ultimately multiply with each other. If you have a Sharding solution, the Sharding solution itself might increase the scalability of Ethereum by a factor of 100, or eventually even more. But then, if you do Plasma on top of the scalability solution, then what that means is, you’re not just doing 100 times of the amount of activity but you are doing 100 times the amount of entrances, the amount of exits, and dispute resolutions”
The alpha version, known as Red Eyes Release has certain limitations. Despite being usable, deposits cannot exceed 0.15 ETH per channel, and for now, only transactions in wETH ( an ERC20 token used for testing) can be made.
Features Included In The Red Eyes Release
- Opening, topping up, closing and settling of payment channels
- Single and multi-hop transfers
- Automatically joining a token network and opening channels with peers
- REST API with endpoints for all functionalities
- Redesigned WebUI
- Raiden Explorer, visualizing the live status of the Network
- Rewritten and more gas efficient smart contracts (i.e. only one contract per token network)
- Improved protocol for dealing with edge cases
- Recoverability in case of an irregular shutdown of the Raiden node
- Integration of the Matrix transport protocol for messaging
After Raiden’s announcement, both ETH and RDN went on a bullish streak. Ethereum surged near 15% in the last 24hours and RDN (Raiden Network Token) rised near 40% in the last week