Author: ZmnSCPxj 2020-12-31 23:26:24
Published on: 2020-12-31T23:26:24+00:00
Ruben Somsen proposes a decentralized two-way peg sidechain design called Softchains, which requires a soft fork to activate new sidechains. 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. 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. 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. Softchain consensus still requires a form of validation from mainchain users, which means that consensus bugs can have an adverse effect. If a Softchain suffers from a non-deterministic consensus bug, it may cause a chain split in mainchain consensus. Similarly, it can theoretically be possible that a Softchain gets a major reorg, invalidating a peg-out right as it would have become accepted on the mainchain, thus splitting consensus. It is also 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. Ruben believes that this proposal could provide more opt-in block space, and it could potentially open the door to chains with entirely different consensus rules. However, it may turn out that the consensus risks outlined above make this prohibitively risky. Ruben invites feedback and comments on his proposal to ensure maximum safety.
Updated on: 2023-06-14T16:54:16.637926+00:00