The Raiden Network is an off-chain scaling solution for performing ERC20-compliant token transfers on the Ethereum blockchain.
Similar to the Lightning Network on Bitcoin, the Raiden Network allows secure transfers of tokens on Ethereum between participants without the need for global consensus. This is achieved using digitally signed and hash-locked transfers, called balance proofs, fully collateralized by previously setup on-chain deposits.
Payment channels allow for practically unlimited, bidirectional transfers between two participants, as long as the net sum of their transfers does not exceed the deposited tokens. These transfers can be performed instantaneously and without any involvement of the actual blockchain itself, except for an initial one-time on-chain creation and an eventual closing of the channel.
The RDN token can be used in micropayment channels on µRaiden.