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State Channels

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Table of contents
    1. 0.2. How State Channels Work
    2. 0.4. Why State Channels Matter

State Channels are off-chain transaction pathways that let users interact directly and securely without needing to record every action on the blockchain.

How State Channels Work

Two or more parties open a state channel by locking funds in a smart contract on the main blockchain. From there, they can conduct multiple transactions off-chain, only submitting the final result once the interaction ends. This significantly reduces congestion and fees, while still maintaining security through cryptographic proofs and smart contract enforcement.

Why State Channels Matter

State Channels improve blockchain scalability by offloading high-frequency transactions. They’re especially useful for use cases like gaming, micropayments, and decentralized exchanges, where fast and cheap interactions are essential. By reducing reliance on the main chain, they help increase transaction throughput and user experience.