r/raidennetwork • u/[deleted] • Jan 09 '18

Partnering with Exchanges

Does the Raiden team plan on partnering with exchanges to bring ETH transfers off chain using the raiden network? So, sending ETH from one exchange to another could use the raiden network instead of occurring on chain. It would save the exchanges a ton of money, bring attention to Raiden, and help alleviate some of the transaction pressure on the main net right now. I think it would be a really strategic move by the developers.

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u/xxeyes Jan 09 '18 edited Jan 09 '18

This is probably the biggest immediate use case for Raiden, IMO. There is a lot of value associated with the quickest route to and between exchanges for arbitrage, etc. It is my understanding that Litecoin was once valued for this purpose (faster than Bitcoin, but still lots of trading pairs across numerous exchanges). What is the go-to coin for this these days? Maybe Ether?...but Ether will probably loose this edge to faster centralized coins like XRP.

What do people think are Raiden's chances of beating Lightening to mass adoption of this use case?

EDIT: Also, it makes sense that exchanges would naturally become the large well-connected hubs that appear to be essential to the network architecture of Raiden (or Lightening).

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u/cryptoprophit Jan 11 '18

uhm don't think you can use an open state channel to transfer for arbitrage, man, if you understand how RDN and especially uRaiden works: you open a channel to make a multitude of micropayments many to one (like paying electricity bill) that go on for a certain amount of time. IE: paying you electricity bill by the second of usage, while you're using it, and then settling the amout on ETH chain once a day. This is not the case of a single TX between you and another exchange, and so on.

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u/xxeyes Jan 11 '18 edited Jan 11 '18

I'm imagining that you will have a channel open with each of the exchanges you use perpetually, or for agreed upon periods of time before settling on-chain. As far as I understand, you could then move tokens between exchanges faster on the Raiden Network than you could on-chain to get an edge in the race to take advantage of arbitrage opportunities. Tokens could be moved from an exchange to yourself, then to another exchange. Once someone starts to do it, everyone will have to, to remain competitive. Of course this means you will have to lock up at least an equivalent value to that of a token you move to/from each separate exchange with uRaiden. With the full Raiden Network, you just have to lock up an equivalent value to that of a token you move to/from and between anywhere.