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Definitions and terminology related to cryptoeconomics, blockchain and distributed ledger technology.

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State Channel

A state channel is an off-chain network running parallel to a blockchain that allows two parties to send off-chain transactions between one another and settle on the base blockchain when necessary. A state channel is considered a generalized form of a payment channel, except that it allows the channel to represent any state of a smart contract, not just transactions and balances. Raiden and Connext Network are examples of state channel projects that aim to offer scalability benefits to Ethereum through a network of state channels.