Sidechains as a solution for blockchain scalability

The crypto industry is constantly seeking ways to increase throughput and reduce the load on main networks. One of the most promising solutions is sidechains, parallel blockchains that operate independently but remain connected to the main network through bidirectional bridges. This technology allows for the transfer of assets between chains and provides more flexible conditions for processing transactions.

What are sidechains

A sidechain is a separate blockchain that operates as a parallel system to the main network. The key feature of such structures is their autonomy: each sidechain can implement its own consensus algorithms and configure block parameters according to specific tasks.

Historically, the concept was developed in October 2014, when the research paper “Enabling Blockchain Innovations with Pegged Sidechains” was published, prepared by Adam Back together with cryptographers and developers, including Matt Corallo, Luke Dashjr, Andrew Poelstra, and Peter Wille.

Mechanism of Operation

Sidechains have significant freedom in choosing parameters. They can use various consensus systems: from Proof of Authority (PoA) to Delegated Proof of Stake (DPoS). This flexibility allows sidechains to achieve significantly higher transaction confirmation speeds and minimize fees compared to the main network.

Validators play a central role in the sidechain ecosystem – they are responsible for verifying operations, creating blocks, and ensuring security. In addition, the block parameters (creation time and size) can be optimized to increase throughput without directly affecting the main network.

Bilateral bridges serve as a connecting link, enabling the transfer of digital assets between systems. This architecture allows the main network to offload by redirecting some operations to specialized sidechains.

EVM compatibility: convenience for developers

Many sidechains support the Ethereum virtual machine (EVM), which opens significant advantages for the developer ecosystem. This compatibility allows for the transfer of smart contracts already written in Solidity to the sidechain without significant modifications. This accelerates the deployment of decentralized applications (DApp) and expands the possibilities for using existing code.

Positive Aspects of Using Sidechains

Scalability and Performance. Sidechains alleviate the load on the main network by allowing large volumes of transactions to be processed in parallel. This contributes to an increase in the overall performance of the ecosystem.

Flexibility and Innovation. The ability to experiment with various consensus mechanisms and block parameters creates a favorable environment for testing new ideas and technological solutions.

Compatibility and Convenience. EVM standard support ensures a quick transition for Ethereum developers and allows for maximum utilization of the existing infrastructure.

Challenges and Risks

Centralization and Decentralization. The pursuit of high throughput often requires a reduction in the number of validators, which can lead to a concentration of power and the weakening of one of the key principles of blockchain.

Self-Security. Each sidechain is responsible for its own security independently of the main network. Although the compromise of a sidechain will not directly affect the main chain, such independence requires enhanced protective measures and creates additional risks.

Implementation Difficulty. Installing and maintaining the operation of a sidechain requires significant technical resources and knowledge, which can hinder the widespread adoption of this solution.

Practical examples of implementation

Polygon. This platform demonstrates how multiple sidechains can work together to scale Ethereum. By using the Plasma framework, Polygon provides fast and cost-effective transactions for decentralized applications.

SKALE. The project offers elastic sidechains, providing developers with the tools to create high-performance DApps with optimal scalability.

Gnosis. The xDai sidechain of this project is focused on providing stable and fast operations, convenient for applications that require minimal delays.

Loom Network. Specializes in the development of gaming and social applications on the blockchain, using the DPoS mechanism to achieve the necessary throughput.

Results

Sidechains are a powerful tool for addressing the scalability issue in the crypto space. Their independence, flexibility, and compatibility with existing standards open up extensive opportunities for innovation and development. However, the use of this technology requires careful analysis of the trade-offs between performance, decentralization, and security. As blockchain technologies continue to evolve, the role of sidechains in building a scalable and universal ecosystem will only increase.