Deconstructing Sidechains — The Future of Web3 Scalability

Web3 had serious scalability issues. But app sidechains have emerged as a viable answer to crypto's most persistent problem.

By far, the most impactful innovation in the Web3 world this year is the sidechain. The world's largest blockchain providers – Binance, Polygon, Ankr, and Avalanche – have all recently released sidechain functionality. They are investing hundreds of millions in these new implementations, and for good reason.

Sidechains are the most likely multichain solution to the crypto scalability problem. Several projects have failed or are blocked once they reach a certain level of traffic. Ethereum gas fees are notoriously expensive, while Solana is continually congested to the point where it needs to be shut down. Needless to say, Web3 can only grow if transactions are fast, inexpensive, and secure.

Layer 2 (L2) solutions have not solved the problem despite many expectations and implementations. Sidechains are different and might prove to be the best answer as crypto enters mainstream adoption.

A sidechain goes by many different names from different vendors. Ankr calls them App Chains; Avalanche calls them a subnet; Polygon calls them a SuperNet. You may also hear the terms parachains, nested blockchains, or application-specific blockchains, which Binance calls application sidechains. Like all things in the world of software development, there are different features and implementations. For example, some sidechains can be equal and interdependent, others in a parent-child relationship where the child takes on the attributes of the parent.

Related: What Are Parachains: A Guide to Polkadot and Kusama Parachains

However, sidechains offer increased scalability as developers can launch a new blockchain or sidechain to meet a specific function. For example, Avalanche has dedicated chains (X-Chain, C-Chain, P-Chain) for specific purposes. So,...