/ERC20-state-channels

The project contains an ERC 20 token which has the ability to be used for one time on chain settlement. Parties can perform transfers and sign the transactions off-chain transactions and when both the parties want to settle, according to the amount needed to be transferred, they can sign and settle the multiple transactions in a single go.

Primary LanguageSolidity

ERC20 State Channel Implementation

This repo contains a Token smart contract which contains a settle feature which helps users to sign transaction off-chain and settle once.

Scenario:

The Token.test.js file contains a test script which runs a scenario representing state channel off-chain and on-chain settlements.

  • For each transaction, users will sign a transfer transaction which will generate a receipt containing signature and message hash.

  • These receipts will be stored to keep the track of each transaction.

  • At the time of settlement, every receipt will be validated.

  • After that, final balance will be calculated based on the off-chain transactions

  • With the help of final balance, it will identify the sender, receiver and amount to transfer.

  • The next step will be to get the signature of both the parties on message hash prepared with:

    • Sender
    • Receiver
    • Amount
    • Nonce (To keep a track of transactions settled on-chain between them)

  • Finally, a settle() transaction will be sent to token contract for on-chain settlement.

To run the tests:

Install packages needed to run the tests:

npm install

To compile the contract:

npm run compile

To run the tests:

npm run test

This command will automatically launch the ganache-cli instance to run the script locally.

Question: Let's say you have already implemented a standardized ERC-20 smart contract for some token. Now you want to add the possibility of securely updating the balances between any two users, off-chain using state channel technique. Can you write simple JavaScript/TypeScript/NodeJS code that generates state channel receipts (signed by both users) and one Solidity function that validates that receipt and updates the balances accordingly? Note that these 2 users can update their balances off-chain multiple times before they actually want to settle it on-chain.