Overview of Sidechains

Sidechains are independent blockchains that run parallel to the main blockchain (mainchain) but are connected to it. They allow for the transfer of assets and data between the mainchain and the sidechain, providing a scalable solution for extending blockchain capabilities without overburdening the mainchain.

Each sidechain operates independently of the mainchain, with its own set of rules and protocols. Sidechains can interact with the mainchain and other sidechains, enabling cross-chain transactions and data exchange.

Developers can customize sidechains to meet specific requirements, including consensus mechanisms, token standards, and block parameters. By offloading transactions and computations to sidechains, the mainchain can maintain high performance and avoid congestion.

Lisk Sidechain Architecture

Lisk sidechains are designed to be highly customizable and interoperable, leveraging the Lisk SDK for development. The architecture involves components that ensure smooth operation and communication with the mainchain.

Registration and Lifecycle

A sidechain begins its lifecycle with a registration process on the Lisk mainchain. This involves submitting a sidechain registration transaction, which includes details such as the sidechain name, chain ID, and initial validators.

Once registered, the sidechain enters the active phase, where it can start processing transactions and exchanging cross-chain messages (CCMs) with other chains. If a sidechain fails to meet certain conditions, such as the liveness requirement (posting cross-chain updates within a specified timeframe), it can be terminated and disconnected from the mainchain.

Cross-Chain Communication

Lisk utilizes cross-chain messages (CCMs) to enable communication between the mainchain and sidechains. These messages can include transaction data, state updates, and validator changes.

A CCU is a transaction that includes a set of CCMs from a sidechain to the mainchain. It contains the state root, certified height, and other relevant data to ensure consistency and authenticity. Each sidechain maintains an inbox and outbox for tracking incoming and outgoing CCMs. These are structured as Merkle trees to efficiently prove the existence of specific messages.

Consensus Mechanisms for Sidechains

Lisk supports multiple consensus mechanisms for sidechains, allowing developers to choose the most suitable option for their applications.

Delegated Proof of Stake (DPoS)

DPoS is the default consensus mechanism for Lisk sidechains, where token holders vote for delegates to validate transactions and create new blocks. Token holders vote for delegates using their LSK tokens. Each vote is weighted based on the number of tokens held. Elected delegates take turns producing blocks in a round-robin fashion, ensuring rapid and efficient block generation.

Proof of Authority (PoA)

PoA is an alternative consensus mechanism where a predefined set of validators, known as authorities, are responsible for block production. Authorities are selected based on off-chain criteria such as reputation and identity. This mechanism trades off decentralization for efficiency and performance. PoA is particularly suitable for private or consortium blockchains where the validators are known and trusted entities.

Interoperability in the Lisk Ecosystem

Interoperability is a cornerstone of the Lisk ecosystem, enabling easy communication and data exchange between different blockchain networks.

Lisk’s interoperability solution relies on a cross-chain messaging protocol that facilitates the transfer of data and assets across chains. These messages can transfer any kind of data between chains, providing flexibility and extensibility for various use cases. Certificates are used to securely transfer state information between chains. They are generated from blocks and signed by validators using BLS signatures, ensuring authenticity and integrity.

The Lisk mainchain is an important interoperability solution by acting as a router for cross-chain messages. The mainchain routes CCMs between sidechains, ensuring efficient and secure communication without processing the full validation of the messages. It maintains state information about registered sidechains, including the number of CCMs sent and the list of current validators.

Customization of Sidechains

The Lisk SDK provides extensive customization options for sidechain developers, allowing them to tailor the blockchain to their specific needs. Developers can choose between DPoS and PoA or implement custom consensus mechanisms. Sidechains can support various token standards, including fungible and non-fungible tokens, enabling diverse applications. Key blockchain parameters such as block time, block size limit, and round length can be customized to optimize performance.

Lisk sidechains can be used to build DeFi applications that require high throughput and scalability. A DeFi platform running on a Lisk sidechain can process transactions independently of the mainchain, ensuring fast and cost-effective operations.

Sidechains offer a scalable solution for tracking and verifying supply chain transactions. For instance: a supply chain sidechain can record the movement of goods, ensuring transparency and traceability without congesting the mainchain.

Gaming applications and NFT platforms can leverage sidechains to handle high transaction volumes and complex logic. An NFT marketplace on a Lisk sidechain can mint and trade NFTs efficiently, providing a seamless user experience.

Highlights

• Overview of Sidechains: Explains the independence, interoperability, customizability, and scalability of Lisk sidechains.
• Sidechain Architecture: Details the registration, lifecycle, and cross-chain communication of sidechains.
• Consensus Mechanisms: Discusses Delegated Proof of Stake (DPoS) and Proof of Authority (PoA) as consensus mechanisms for sidechains.
• Interoperability: Covers Lisk’s cross-chain messaging protocol and the role of the mainchain in facilitating communication.
• Customization and Use Cases: Provides examples of customization options and practical applications in DeFi, supply chain management, and gaming.