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State Channel

State channels are a layer 2 scaling solution for blockchains. They allow participants to conduct numerous transactions outside of the main blockchain (off-chain), thus reducing the network’s load. These off-chain transactions occur in a private channel between participants. Once the state channel is closed, the final state of these transactions is then recorded on the blockchain. This approach allows for rapid, low-cost transactions that are still secured by the blockchain, making state channels ideal for scenarios where parties need to conduct frequent or rapid transactions, such as in gaming or micropayments.