# What Is a 'Sidechain' and Its Purpose? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

---

## What Is a ‘Sidechain’ and Its Purpose?

A sidechain is a separate, independent blockchain that is connected to a main blockchain (parent chain) via a two-way peg. Its primary purpose is to improve the scalability and efficiency of the main chain by offloading transactions and processing them on the sidechain.

Assets can be moved between the two chains. This allows for faster transaction times and lower fees on the sidechain without compromising the security of the main chain.

- [How Does the Two-Way Peg Mechanism Work for a Sidechain?](https://learn.greeks.live/path/how-does-the-two-way-peg-mechanism-work-for-a-sidechain/)

- [How Is the Merkle Tree Used in Side-Chain Technology?](https://learn.greeks.live/path/how-is-the-merkle-tree-used-in-side-chain-technology/)

- [What Are the Security Risks Associated with the Two-Way Peg or Bridge Mechanism of a Sidechain?](https://learn.greeks.live/path/what-are-the-security-risks-associated-with-the-two-way-peg-or-bridge-mechanism-of-a-sidechain/)

- [In a Sidechain, How Is the Merkle Root Used for Inter-Chain Communication?](https://learn.greeks.live/path/in-a-sidechain-how-is-the-merkle-root-used-for-inter-chain-communication/)

- [What Is the Concept of a ‘Sidechain’ and How Does It Rely on Cryptographic Security?](https://learn.greeks.live/path/what-is-the-concept-of-a-sidechain-and-how-does-it-rely-on-cryptographic-security/)

- [How Is a “Sidechain” Different from the Main Blockchain?](https://learn.greeks.live/path/how-is-a-sidechain-different-from-the-main-blockchain/)

- [Can a UTXO Transaction Be Replayed on a Sidechain?](https://learn.greeks.live/path/can-a-utxo-transaction-be-replayed-on-a-sidechain/)

- [What Is a Sidechain and How Does Its Security Model Differ from a Rollup?](https://learn.greeks.live/path/what-is-a-sidechain-and-how-does-its-security-model-differ-from-a-rollup/)

## Glossar

### [Sidechain](https://learn.greeks.live/area/sidechain/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ A Sidechain represents a distinct blockchain network that operates independently but is cryptographically linked to a main chain, typically through a two-way peg mechanism allowing assets to be transferred between the two ledgers.

### [Independent Blockchain](https://learn.greeks.live/area/independent-blockchain/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Resilience ⎊ Independent blockchains, particularly those designed with sustainability in mind, represent a critical infrastructure layer for decentralized systems, offering inherent resistance to single points of failure and external manipulation.

## Discover More

### [What Is the Purpose of a 'Methodology Document' for a Settlement Index?](https://learn.greeks.live/path/what-is-the-purpose-of-a-methodology-document-for-a-settlement-index/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of a 'Methodology Document' for a Settlement Index?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-of-Decentralized-Finance-Volatility-Skew-Measurement-Apparatus.webp)

A public blueprint detailing the exact calculation, data sources, and error handling for the index, ensuring transparency and auditability of the settlement price.

### [What Is the Concept of a 'Sidechain' and How Does It Rely on Cryptographic Security?](https://learn.greeks.live/path/what-is-the-concept-of-a-sidechain-and-how-does-it-rely-on-cryptographic-security/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Concept of a 'Sidechain' and How Does It Rely on Cryptographic Security?](https://learn.greeks.live/wp-content/uploads/2025/10/Macro-Scrutiny-of-On-Chain-Data-Flow-Via-Transparent-Green-Gas-Line-Analogy.webp)

A sidechain is a separate blockchain pegged to the main chain; cryptographic security ensures the integrity of the two-way asset peg.

### [What Is the Purpose of a "Pause Function" in a Token Contract?](https://learn.greeks.live/path/what-is-the-purpose-of-a-pause-function-in-a-token-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of a "Pause Function" in a Token Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Microelectromechanical-Systems-Probe-Interfacing-High-Reflectivity-Non-Fungible-Token-Storage-Substrate-Data-Extraction.webp)

An emergency function allowing authorized parties to temporarily halt token operations to prevent further damage during a security exploit.

### [What Is the Purpose of an Exchange's "Circuit Breaker" Mechanism during Extreme Order Flow?](https://learn.greeks.live/path/what-is-the-purpose-of-an-exchanges-circuit-breaker-mechanism-during-extreme-order-flow/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of an Exchange's "Circuit Breaker" Mechanism during Extreme Order Flow?](https://learn.greeks.live/wp-content/uploads/2025/10/Dissecting-Spherical-Volatility-Surfaces-Through-Metalloid-Rods-Quantifying-Option-Premium-Decay-Dynamics.webp)

Automatically halts trading when prices move excessively to prevent panic, allowing market makers to restore liquidity and re-quote prices.

### [How Can a Blockchain Project Increase Its 'Cost to Attack' without Changing Its Consensus Mechanism?](https://learn.greeks.live/path/how-can-a-blockchain-project-increase-its-cost-to-attack-without-changing-its-consensus-mechanism/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can a Blockchain Project Increase Its 'Cost to Attack' without Changing Its Consensus Mechanism?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Actuation-Dynamics-of-Near-Zero-Latency-Hardware-Wallet-Seed-Phrase-Retrieval-Mechanism.webp)

Increase block rewards/price to boost hash rate, or switch to a niche mining algorithm to raise the hardware barrier.

### [What Is the Purpose of the CFTC'S'foreign Board of Trade' Exemption?](https://learn.greeks.live/path/what-is-the-purpose-of-the-cftcs-foreign-board-of-trade-exemption/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of the CFTC'S'foreign Board of Trade' Exemption?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetrical-Volatility-Surface-Representation-in-Decentralized-Option-Primitives-Configuration.webp)

Allows foreign exchanges to offer certain contracts to US persons without DCM registration, provided they meet CFTC oversight conditions.

### [What Is the Purpose of an Insurance Fund in Perpetual Futures Trading?](https://learn.greeks.live/path/what-is-the-purpose-of-an-insurance-fund-in-perpetual-futures-trading/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of an Insurance Fund in Perpetual Futures Trading?](https://learn.greeks.live/wp-content/uploads/2025/10/Microscopic-View-of-Digital-Asset-Liquidity-Provision-Mechanism-Interface-for-Decentralized-Exchange-Order-Flow.webp)

A capital pool that covers losses from liquidated positions that fall below their bankruptcy price, preventing ADL for solvent traders.

### [What Is the Purpose of an Auction Mechanism in the Liquidation Process?](https://learn.greeks.live/path/what-is-the-purpose-of-an-auction-mechanism-in-the-liquidation-process/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of an Auction Mechanism in the Liquidation Process?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Representation-of-Collateralized-Debt-Position-Quadrant-Rotation-in-Decentralized-Finance.webp)

It is used to sell liquidated collateral to the highest bidder to maximize the recovery value, minimize bad debt, and ensure transparent distribution.

### [How Does the 'Velocity' of a Token Relate to Its Utility versus Its Speculative Nature?](https://learn.greeks.live/path/how-does-the-velocity-of-a-token-relate-to-its-utility-versus-its-speculative-nature/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the 'Velocity' of a Token Relate to Its Utility versus Its Speculative Nature?](https://learn.greeks.live/wp-content/uploads/2025/10/Microscopic-Analysis-of-Cryptographic-Key-Extraction-Through-Differential-Exchange-Mechanism.webp)

High velocity means frequent exchange (utility); low velocity means holding (speculation). High utility should correlate with high velocity.

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**Original URL:** https://learn.greeks.live/learn/what-is-a-sidechain-and-its-purpose/
