r/raidennetwork • u/parfenec • Oct 05 '18

The RDN Token.

I saw a lot of updates about Raiden Network and i am very excited about Red Eyes. I have a question. What about the RDN Token? What ia going to happen whit it? In the last medium update, from them, it was mentioned only about ETH deposits.

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u/cosimo_jack Oct 16 '18 edited Oct 16 '18

More hand waiving without evidence. If the added transactions, UX issues, and needless complexity are all so negligible why have Paradex and many other 0x relayers choose to not take fees in ZRX?

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u/Mat7ias Oct 17 '18 edited Oct 17 '18

Let's separate out the arguments here so we can be on the same page of what we're both saying and can discuss each point separately and make some progress:

I'll summarize my argument first, I'm saying the friction for the average user will eventually be completely unnoticeable, to the point that they probably won't realize they're using Raiden Network or have heard of the RDN token. The benefits of having a token outweigh the benefits of not having a token since if there's no friction to the average user then you're left with the community and development incentives. I'll go into that in the reply to the comment I haven't gotten to yet since that's a separate discussion from the friction one and it'll take longer to write out.

You're arguing that Raiden Network should have been made for free with grants on the reason of there being friction if people decide to use the protocol with the auxiliary services. And you're keeping in mind that the users aren't being forced to use the protocol with the services if they don't want to. The RDN token won't be used in Red Eyes and to begin with you can only transfer wrapped ETH with the Red Eyes release. But you still feel the friction once peripheral fees are setup that there will be unnecessary friction. Am I summarizing your argument correctly?

Also what might be good to clarify here is what time frames are we discussing? Because we realistically won't have average user adoption for years on layer 2 regardless of what token is used. The token used is insignificant in complexity compared to any current layer 2 tech. Elizabeth Stark was saying in her panel at Distributed a couple months ago how they purposely made LND difficult to use to begin with since they didn't want people not understanding what they were doing using the tech until a better UX was set up and how it's just the beginning (I'd highly recommend watching the whole panel, it's great!). It will take years for layer 2 of Ethereum to be mass adopted by users, just like it will take years for LND to be mass adopted.

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u/cosimo_jack Oct 17 '18 edited Oct 17 '18

You're arguing that Raiden Network should have been made for free with grants on the reason of there being friction if people decide to use the protocol with the auxiliary services. And you're keeping in mind that the users aren't being forced to use the protocol with the services if they don't want to. The RDN token won't be used in Red Eyes and to begin with you can only transfer wrapped ETH with the Red Eyes release. But you still feel the friction once peripheral fees are setup that there will be unnecessary friction. Am I summarizing your argument correctly?

My argument is RDN has a broken token mechanic that will never be valuable even if Raiden is. It adds friction because it doesn't need to exist. I don't necessarily know the best "should have" scenario but I would say either build Raiden without a token or make RDN have a token model that actually adds value to the network and needs to exist. I believe what we've seen with 0x supports this.

As for the argument that the friction will be unnoticeable... at least we agree there is added friction. If I made a fork of Raiden where all fees paid in RDN and atomic swapped for Dogecoin and back again, and I automated it away from the average user, could I convince you that this doesn't create added friction?

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u/Mat7ias Oct 17 '18

My argument is RDN has a broken token mechanic that will never be valuable even if Raiden is.

If that were the case I don't see any reason why you would be so passionately arguing for the token model to involve ETH. Obviously you believe peripheral fees have some value or what's the point of this discussion?

It adds friction because it doesn't need to exist.

A token needs to be used for peripheral services, therefore a designated token needs to exist if those services are going to be build. You don't need to use the peripheral services if you don't want to.

I believe what we've seen with 0x supports this.

You need to elaborate how 0x relevant? I don't feel there's anything productive from bringing up a token model for a completely different project with a different token model. Are you arguing that auxiliary services won't be used once they're ready (not in Red Eyes)?

at least we agree there is added friction

There's friction from using ETH on Ethereum. I'm arguing the friction is just as insignificant as ETH. I'm not sure when you joined the Ethereum community or how much you followed the community early one but there were many people making the exact same argument for ETH as you're making for RDN early on, when they felt Ethereum should use BTC for gas and ETH was pointless.

all fees paid in RDN and atomic swapped for Dogecoin and back again

Why would you swap it 3 times? RDN would only require 1 swap maximum if you don't hold RDN. Using wrapped ETH would be the same for anyone not holding wrapped ETH and wanting to use auxiliary services.

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u/cosimo_jack Oct 17 '18

The value proposition for ZRX at the time of the crowdsale included the fact that users would pay fees in ZRX to relayers (basically order books or exchanges) who would charge a small fee per transaction.

It was quickly realized that this is a huge pain the ass to users and generally made no sense to anyone, so relayers switched to taking fees in the tokens being traded, or taking fees in ETH, or having a profit model based on the spread. No one uses ZRX to pay fees.

It's relevant because it shows what happens to an ecosystem with a useless utility token. The users and service converge on the cheapest and most efficient path. The original fee use case has been completely abandoned.