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State Channels


State channels are a technique for performing transactions and other state transitions in a second layer built on top of a blockchain. State channels make blockchains more efficient by moving many processes off-chain, while still retaining a blockchain’s characteristic trustworthiness. Payment channels are a type of state channel that allows users to make "off-chain payments" to each other. The term "state channels" generalizes this approach beyond payments.

Examples are: * Counterfactual * Raiden Network * Lightning Network * FunFair


Counterfactual is building a generalized framework for native state channels integration in Ethereum-based decentralized applications.


Raiden Network

The Raiden Network is an off-chain scaling solution, enabling near-instant, low-fee and scalable payments. It’s complementary to the Ethereum blockchain and works with any ERC20 compatible token. It is Ethereum’s version of Bitcoin’s Lightning Network.


Lightning Network

Lightning is a decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants.


  • Whitepaper - overview the Bitcoin Lightning Network: Scalable Off-Chain Instant Payments.
  • Summary - brief overview of the Lightning Network.

FunFair's Fate Channels

A Fate Channel is a State Channel opened for the duration of a gaming session, supporting custom gaming messages between the FunFair client and server. The only transactions on the blockchain occur at the beginning and end of the gaming session.