Ethereum’s Lightning Network Raiden to ICO

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One of the most anticipated ethereum projects, which aims to increase scalability through second layer protocols similar to the Lightning Network, has suddenly announced they are to undertake an Initial Coin Offering (ICO) this October.

It’s unclear how much the team is hoping to raise, with no one available at the time of writing. Nor is it clear why they have suddenly decided to ICO, but the funds will be used to further develop the network.

The token will also have some utility through the payment of Raiden service providers, with its main use being to resource the completion of Raidens first stage and then fund its extension of second layer protocols to smart contracts.

Remaining funds may also be used towards the development of Raiden based decentralized applications, with the ICO to be performed in a dutch auction manner.

That is, the initial price is expected to be extremely high, with it gradually falling until there is market demand to buy it. This way, a rush to buy tokens may be avoided. But it has not worked previously.

Gnosis ICO-ed in the same style, yet investors still bought at what back then seemed like a very high valuation. With most token sales now taking a different approach of simply limiting investors to only $1,000 to $2,000 per individual.

Thus ensuring investors are dispersed, while allowing for greater inclusivity as most are given the opportunity to participate in the token sale.

The Raiden Network is now in its final testing stage, but an estimated launch date remains unclear, especially in light of the ICO. Thus we may expect it during winter, or perhaps even spring.

It has been in development for around two years, with a competitor of sorts, Plasma, developed by Joseph Poon in collaboration with Vitalik Buterin, rising in the meantime.

Both projects are seen as complementary to ethereum’s on-chain scalability plans, with the currency so employing all available methods to reach Visa scale and beyond in a couple of years, according to Buterin.

 

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