<p>Sidechains do require their own tokens, consensus protocols, and operators, but there's no reason why all three of those <em>have</em> to be different than the tokens, protocols, and operators of the main chain.</p>
<p>They <em>can</em> be different, which is why sidechains are so flexible and versatile, it really just depends on the needs/purposes of the specific sidechain.</p>
<p>For example, a sidechain (or Hydra Head) whose sole purpose is to scale ADA or native token transactions can use sidechain-ADA on a 1:1 basis to mainchain-ADA, a modified version of Ouroboros that prioritizes speed over security, and a node operator that has already built a solid track record of distributed systems administration (i.e. established SPO's).</p>
<p>On the other hand, a side chain can have its own monetary policy with a (locally) global accounting style and arbitrary tokenomics, or any combination of services.</p>
<p>Sky's the limit!</p>

CC BY-SA 4.0
2021-11-10T19:06:45.130Z
2021-11-10T19:06:45.130Z
zhekson
<p>I just finished IOHK’s whiteboard video about sidechains.</p>
<p><a href="https://www.youtube.com/watch?v=04D2BP33YI8" rel="nofollow noreferrer">https://www.youtube.com/watch?v=04D2BP33YI8</a></p>
<p>I felt like I absorbed much of the information like NiPoPow’s and the problems that sidechains can solve. However, I am left with a few burning questions:</p>
<p>1.) Do all sidechains require their own token, consensus, node operators, etc?
2.) How does the receiving chain mint the newly transferred coin? How is this even possible? I thought minting was only allowed based on a monetary policy. Is this a special exemption? I understand chain a will burn the token, and chain b will validate bc of the NiPoPow, but I don’t understand how chain b can mint a new token on request.</p>

<sidechains>
1.) Do all sidechains require their own token, consensus, node operators, etc?
# 1.) Do all sidechains require their own token, consensus, node operators, etc?

(Asked by: username_0 on 2021-11-09)

I just finished IOHK’s whiteboard video about sidechains.

<https://www.youtube.com/watch?v=04D2BP33YI8>

I felt like I absorbed much of the information like NiPoPow’s and the problems that sidechains can solve. However, I am left with a few burning questions:

1.) Do all sidechains require their own token, consensus, node operators, etc?
2.) How does the receiving chain mint the newly transferred coin? How is this even possible? I thought minting was only allowed based on a monetary policy. Is this a special exemption? I understand chain a will burn the token, and chain b will validate bc of the NiPoPow, but I don’t understand how chain b can mint a new token on request.

**Tags:** sidechains

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## 1 answers

### Answer by username_1 on 2021-11-10. Score: 2

Sidechains do require their own tokens, consensus protocols, and operators, but there's no reason why all three of those *have* to be different than the tokens, protocols, and operators of the main chain.

They *can* be different, which is why sidechains are so flexible and versatile, it really just depends on the needs/purposes of the specific sidechain.

For example, a sidechain (or Hydra Head) whose sole purpose is to scale ADA or native token transactions can use sidechain-ADA on a 1:1 basis to mainchain-ADA, a modified version of Ouroboros that prioritizes speed over security, and a node operator that has already built a solid track record of distributed systems administration (i.e. established SPO's).

On the other hand, a side chain can have its own monetary policy with a (locally) global accounting style and arbitrary tokenomics, or any combination of services.

Sky's the limit!


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