Sidechain

A sidechain is a separate blockchain that runs alongside a main chain and connects to it through a two-way bridge, letting assets move between the two, while maintaining its own consensus and validators. Unlike a true layer 2, a sidechain does not inherit the main chain's security: if its validator set colludes or fails, the main chain cannot protect users' funds on the sidechain.

Sidechains exist mainly to offer cheaper, faster, or more flexible environments than the base chain. Polygon PoS is the best-known example in the Ethereum ecosystem: an EVM-compatible chain secured by its own proof-of-stake validator set, connected to Ethereum by a bridge, where transactions cost a fraction of a cent. Bitcoin sidechains such as Liquid and Rootstock similarly let BTC-pegged assets move into environments with faster settlement or smart contracts, secured by a federation of functionaries rather than by Bitcoin's miners.

The crucial distinction — and the common misconception — is lumping sidechains together with rollups as "layer 2s." A rollup posts its transaction data to the main chain so users can always exit using layer-1 data alone; a sidechain posts only checkpoints or nothing, so using one means trusting its own validators and, critically, its bridge, which holds the locked assets backing everything on the other side. Bridge compromises have caused some of the largest thefts in crypto history, which is why security-focused users treat moving assets to a sidechain as a real change in trust assumptions, not just a cheaper venue.