A sidechain is basically a separate blockchain that functions alongside the main blockchain and is connected to it via a two-way link. Through this connection, the users can easily transfer assets, including tokens, back and forth between the main blockchain and the sidechain. The sidechain’s function is to increase the main blockchain’s capabilities without changing the basic characteristics of the latter.
Sidechains can experiment with new features, handle different types of transactions, or just perform the activities at a faster and cheaper rate than the main network. For example, the main chain might be focused on security and decentralization while sidechain could be boosting speed, providing low fees, or even supporting special privacy or gaming features. This situation permits the sidechains to be the area where developers can experiment with new ideas without risking the stability of the main blockchain.
When a user wants to transfer his tokens to the sidechain, his original tokens are usually locked on the main chain and then an equal amount is generated or released on the sidechain. In the case of his decision to return, he follows the opposite process.
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Sidechains are widely used in the world of cryptocurrencies and are considered one of the main steps towards networks that can handle more applications and are thus scalable. In simpler terms, a sidechain is like an extra lane next to a traffic-ridden highway; it removes congestion while still being connected to the main road.