Sidechain

A sidechain is a separate blockchain that operates parallel to a main blockchain, allowing assets and information to be transferred between them. Sidechains are typically used to offload transactions from the main chain, improving scalability, speed, and efficiency. They can also introduce new features or functionalities not present on the main chain. Assets can be moved from the main chain to the sidechain through a two-way peg, ensuring that the assets remain secure while offering improved performance. Example: The Liquid Network is a Bitcoin sidechain that allows faster transactions and the creation of custom assets like stablecoins while leveraging Bitcoin’s security.