Sidechain

Overview

A sidechain is an independent blockchain that runs in parallel to a main chain and is connected to it via a two-way bridge for transferring assets or data. Unlike rollups, sidechains do not post their data to the main chain and do not inherit its security; they enforce their own consensus rules. Sidechains offer flexibility and cheap capacity while trading away some of the base chain's guarantees.

How It Works

Users move assets from the main chain to the sidechain through a bridge, where the main-chain assets are locked and equivalent tokens are minted on the sidechain. Transactions then occur on the sidechain under its own consensus, which may be proof of stake or another mechanism. To return, users burn or lock the sidechain tokens and the bridge releases the original assets, subject to the sidechain's finality and the bridge's trust assumptions.

Why It Matters

Sidechains demonstrate the trade-off between independence and security: they can innovate with new consensus designs and scale cheaply, but the main chain cannot protect funds that live on the sidechain. This makes sidechain security entirely dependent on the sidechain's own validators. They remain relevant for specific use cases and for understanding why security inheritance became a defining feature of rollups.

Related Concepts

Sidechains are connected to main chains through Bridges, and their separate consensus contrasts with the security inheritance of Rollups and Layer 2s. They predate and contextualize today's scaling landscape.