Author: Ruben Somsen 2020-12-31 22:00:17
Published on: 2020-12-31T22:00:17+00:00
Ruben Somsen proposes a design for fully decentralized two-way peg sidechains called Softchains. The activation of new sidechains requires a soft fork, and all softchains are validated by everyone via Proof-of-Work Fraud Proofs (PoW FP), which is a consensus mechanism that only requires the validation of disputed blocks. PoW FP provides a low-bandwidth way of determining if a chain, and thus a peg-out, is valid. Peg-ins occur by freezing coins on the mainchain and assigning them to a softchain, while peg-outs occur by creating a mainchain transaction that points to a peg-out transaction on a softchain and waiting for a sufficient number of mainchain confirmations. The peg-in/peg-out mechanism itself would require a soft fork, and subsequently every softchain that gets activated will also require a soft fork.The safest design would be a set of softchains that shares its consensus code with Bitcoin Core, with the addition of UTXO set commitments, and disabling non-taproot address types to minimize certain resource usage issues. All users validate the mainchain as usual with their full node, and all softchains are validated with PoW FP consensus. If a user is interested in directly using a specific softchain, they should run it as a full node in order to get fast consensus.Softchain consensus still requires a form of validation from mainchain users, which means that consensus bugs can have an adverse effect. It is important that each softchain produces a non-trivial amount of PoW because if the difficulty is too low, the cost of creating forks and increasing the resource usage of PoW FP consensus goes down. It may turn out that the consensus risks outlined above make this prohibitively risky, but at the very least, it seems worth exploring the possibilities. At a minimum, it would provide more opt-in block space, and it could potentially open the door to chains with entirely different consensus rules.
Updated on: 2023-06-14T16:54:00.137676+00:00