diff --git a/blockchain_integration/pi_network/pi-network-layer2-scaling/tests/channels/StateChannel.test.js b/blockchain_integration/pi_network/pi-network-layer2-scaling/tests/channels/StateChannel.test.js
new file mode 100644
index 000000000..17e41d481
--- /dev/null
+++ b/blockchain_integration/pi_network/pi-network-layer2-scaling/tests/channels/StateChannel.test.js
@@ -0,0 +1,56 @@
+// StateChannel.test.js
+const { expect } = require("chai");
+const { ethers } = require("hardhat");
+
+describe("StateChannel Contract", function () {
+    let StateChannel;
+    let stateChannel;
+    let ChannelManager;
+    let channelManager;
+    let owner;
+    let participant1;
+    let participant2;
+
+    beforeEach(async function () {
+        [owner, participant1, participant2] = await ethers.getSigners();
+
+        ChannelManager = await ethers.getContractFactory("ChannelManager");
+        channelManager = await ChannelManager.deploy();
+        await channelManager.deployed();
+
+        StateChannel = await ethers.getContractFactory("StateChannel");
+        stateChannel = await StateChannel.deploy(channelManager.address, participant1.address, participant2.address);
+        await stateChannel.deployed();
+    });
+
+    it("should open a channel successfully", async function () {
+        await stateChannel.connect(participant1).openChannel();
+        const isOpen = await stateChannel.isOpen();
+        expect(isOpen).to.be.true;
+    });
+
+    it("should allow state updates", async function () {
+        await stateChannel.connect(participant1).openChannel();
+        const newState = ethers.utils.keccak256(ethers.utils.toUtf8Bytes("New State"));
+        await stateChannel.connect(participant1).updateState(newState);
+        
+        const currentState = await stateChannel.getCurrentState();
+        expect(currentState).to.equal(newState);
+    });
+
+    it("should close the channel successfully", async function () {
+        await stateChannel.connect(participant1).openChannel();
+        await stateChannel.connect(participant1).closeChannel();
+        
+        const isOpen = await stateChannel.isOpen();
+        expect(isOpen).to.be.false;
+    });
+
+    it("should revert when trying to update state after closing the channel", async function () {
+        await stateChannel.connect(participant1).openChannel();
+        await stateChannel.connect(participant1).closeChannel();
+        
+        const newState = ethers.utils.keccak256(ethers.utils.toUtf8Bytes("New State"));
+        await expect(stateChannel.connect(participant1).updateState(newState)).to.be.revertedWith("Channel is closed");
+    });
+});