One of ethereum's most highly anticipated scaling projects is preparing to launch a token sale.
To be held this October, the initial coin offering (ICO) for Raiden Network will seek to further fund the development of the payments protocol. Led by blockchain consulting firm Brainbot and its co-founder Heiko Hees, the milestone will be the latest for a project first unveiled in 2015 as a way to increase transaction capacity on the world's second-largest blockchain.
According to the entity, funds will be used to finally complete the network, enabling ethereum users to send payments back and forth at higher volumes, without needing to trust intermediaries.
But, why would users buy the token?
Due to its design, the Raiden Network will likely cost fees. For one, Raiden requires that users "watch" their payment channels for a certain period of time to make sure funds aren't stolen. But, users aren't likely to want to sit at their computer and do it themselves.
The "fix" is to outsource the watching of the payment channels to other vendors in return for a small payment, and it's here where the Raiden team is looking to insert its tokens, called RDN.
Still, the Raiden team hopes the sale itself will be "boring," claiming they will be doing little to market it.
The team said the current plan is to hold a "uniform price Dutch auction," meaning the price of the tokens would decline in cost over the course of the sale. The hope is this method will generate less hype, as those that know about the sale will have an incentive to stay tight-lipped to buy tokens at a cheaper price.
Still, a similar model arguably did not quite pan out as anticipated for Gnosis, another ethereum-based project that tried a similar model last spring. Despite attempts to discourage speculation, Gnosis tokens sold out quickly, with $12.5 million snapped up in roughly 15 minutes.
Elsewhere, the team said the funds would be used for other promised projects.
This includes the completion of uRaiden, a recently announced version of the off-chain solution designed for applications built on top of ethereum that don't need such complex micropayments. And, if there's enough money left, the developers have other projects in mind.
One is Raidos, an early-stage project revealed to CoinDesk that would extend Raiden so that it works for more complicated smart contracts.
"This makes it possible to run decentalized applications much faster. Features like this are needed if you want a 100 percent fair exchange," the spokesperson explained.
Any remaining funds, the team said, would then be used to fund decentralized applications on the Raiden network.
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To be held this October, the initial coin offering (ICO) for Raiden Network will seek […]
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