Sidechain

A sidechain runs alongside a main blockchain and lets assets move between the two. Users lock coins on the main chain and receive an equivalent amount on the sidechain, and the process runs in reverse to move back. The sidechain has its own consensus rules, block times and fees, which lets it try out features the main chain lacks.

Liquid and Rootstock are well-known Bitcoin sidechains, and Polygon PoS was long described as an Ethereum sidechain. The key difference from a rollup is security: a rollup posts its data to the main chain and inherits its guarantees, while a sidechain relies on its own validators or on a federation of signers.

If a sidechain's validators or bridge signers are compromised, funds can be stolen without any failure on the main chain. The Ronin bridge hack in 2022, which cost more than $600 million after attackers gained control of validator keys, shows how concentrated that risk can be.