The blockchain industry is constantly evolving with new developments and innovations in software and technology. The competition is high and every existing cryptocurrency project is still under development and has many problems to solve.
One of these is Ethereum, which is one of the most popular and popular blockchain projects in the industry.
Ethereum provides a platform for developers to create and distribute decentralized applications (dapps) and smart contracts. It also allows the creation of new cryptocurrencies (token ERC-20 and ERC-721) and presents its own cryptocurrency known as Ether (ETH).
Ethereum aims to be the leading blockchain platform with the ability to process 1 million transactions per second. The blockchain project that seeks to help Ethereum achieve this goal is Raiden Network (RDN).
Red Eyes Protocol by Raiden Network
Raiden Network has developed a protocol called "Red Eyes Protocol" which aims to scale the transfer of tokens on the Ethereum network. The protocol is now live on the Ethereum mainnet in an alpha test phase.
They encourage users to test the protocol with caution while taking part in the Raiden Network bug-fixing program. As the protocol is very new, the Raiden Network team has taken mitigation measures to limit the damage caused by errors or improper use of the protocol.
As stated in the official blog post on the Red Eyes release:
Deposit limits (0.15 ETH per channel / 250 ETH total maximum network value), as well as a deprecation switch were put in place. In addition, the Red Eyes version of Raiden Network is limited to a token network, WETH (Ether wrapped).
Functionality in this version of Red Eyes
The features in which users can try and experiment in this version of Red Eyes include:
- Opening, topping up, closing and settlement of payment channels
- Single and multi-hop transfers
- Automatic association of a token network and opening of channels with peers
- REST API with endpoint for all features
- Redesigned WebUI
- Raiden Explorer, displaying the live status of the network
- Smart contracts rewritten and more efficient in terms of gas (for example, one contract per token network)
- Best protocol for dealing with borderline cases
- Recovery in case of irregular arrest of the Raiden node
- Integration of the Matrix transport protocol for messaging
The current version of Red Eyes has several limitations due to its testing phase. For example, there is no support for third-party services to monitor channels on behalf of nodes or path search services.
There is no support for atomic swaps or the updating of smart contracts in the network. The only way to update the network is to close all channels and redistribute a new smart contract and reopen the channels.
Safety notes and known problems
The official blog post on Raiden Network's Red Eyes release includes an extensive list of security notes and system requirements to mitigate risks and prevent loss of funds.
However, the post notes that the loss of funds is still possible even when you follow these notes, so urge users to proceed with extreme caution.
Furthermore, there are problems in Raiden Network that users should be aware of. These problems include; compromised user system, a complete disk, blockchain congestion and chain reorganizations.
What does the Red Eyes protocol of Raiden Network mean for Ethereum?
When Ethereum (ETH) was traded close to its all-time high at the start of this year, the network became heavily congested by the increase in transactions and Ethereum dapps such as CryptoKitties.
Once the complete implementation of Raiden Network is completed, the Ethereum network will manage 1 million transactions per second. Ethereum will make this possible by processing out-of-chain transactions, resulting in faster and cheaper transactions on the Ethereum network.
The Raiden Network Red Eyes protocol is very similar to Lightning network protocol for Bitcoin. Both have an off-chain scalability solution to facilitate faster and cheaper transactions.
Therefore, if Raiden Network's Red Eyes protocol is successful, the implications for an increase in the price and status of Ethereum as a development platform and leading smart contract are highly probable.
The price of Ethereum (ETH) is around $ 125, which is an increase of 8% over the ETH price of $ 115 just before the release of the Red Eyes protocol by Raiden Network. We will keep the price of Ethereum in mind as the Raiden Network Red Eyes protocol has been tested in battle.
Will the Raiden network succeed in scaling down Ethereum? How long will the test phase last? Let us know what you think in the comments section below.