This week’s blog will explore other Ethereum scaling solutions, particularly Sidechains. We will discuss:
- What Sidechains are
- How Sidechains work
What are Sidechains?
A sidechain runs its own blockchain that is parallel to the mainchain(or sometimes called “parent chain”) and operates independently. According to ethereum.org, sidechains “work as the same as the main Ethereum chain, it does not use Ethereum, it is Ethereum”, and they “look, feel, act just like the mainchain(Ethereum in this case)”.
Sidechains are connected to the mainchain via a two-way bridge which we will explain in detail below. Essentially, sidechains can execute any computation-expensive operations(such as validation) to offload the traffic from the mainchains. Sidechains cannot operate without a mainchain, but it is not a mandatory component of the mainchain.
Because sidechains have their own validators/miners, blockchain and even their own consensus mechanism, sidechains are technically NOT layer 2. This means they are responsible for their own security, unlike the rollups we discussed last week. In addition, sidechains are often more centralised than their corresponding mainchain, which we will see why shortly.
Sidechains are not a concept that only applies to Ethereum or other smart contracts based blockchains, Bitcoin has its version of a sidechain too. For example, the project Rootstock is a sidechain blockchain that allows smart contracts interaction on the Bitcoin ecosystem, and it extends the capability of the BTC network.
How do Sidechains work?
The ability to move data and assets between sidechains and mainchains is an exciting and important part of the sidechains. From this, transactions can be executed on the sidechains quickly and inexpressively, and the final results can be transferred back to the mainchains and settled.
This level of interoperability is achieved by the so-called two-way bridge, which consists of two operations:
- Locking up(to the sidechain)
- Releasing(to the mainchain)
Locking up
Before moving resources(coins/tokens, NFTs, digital arts etc.) from the mainchain to the sidechain, users firstly need to lock them up on the mainchain. Once locked up, the sidechains will create the identical resource/minted(this is why we said the sidechain acts/feels/looks like the mainchain), and users can perform as many transactions as they want on the sidechain without congestion the mainchain network.
Releasing
When users have completed all the transactions on the sidechain and wish to settle the final results on the mainchain, the updated resources that the mainchain locked up previously will be destroyed/burned on the sidechain and unlocked.
Federation
Another aspect of the sidechains that should be briefly discussed is Federation. This is referred to as the middleman responsible for the validity of the locking up & releasing process we described above. It ensures that the value of the minted resource on the sidechain is equivalent to whatever is locked up on the mainchain.
The federation is sometimes purely controlled by the code, but the organisation behind the sidechains mainly maintains it. This is why sidechains are considered to be more centralised occasionally.
Outro
Overall, sidechains is an established technology to improve scalability. It is faster and cheaper but sacrifices some degree of security and decentralisation.
That’s it for this week’s content! See you again next week.
Reference
[1]https://youtu.be/9pJjtEeq-N4
[2]https://ethereum.org/en/developers/docs/scaling/sidechains/
[3]https://docs.ethhub.io/ethereum-roadmap/layer-2-scaling/sidechains/#how-do-sidechains-work
