TRON’s New Sun Network Highlights the Pivotal Role of Sidechain Technology

Tron (TRX) is again announcing a series of development upgrades to make the Tron network more scalable. The reason for this need for scalability lays in the increased usage of DApps.

A DApp is an abbreviation for a decentralized application. For most users, the application will look and feel the same as a normal application you can find in the App Store or Google PlayStore, however, the app is built on top of blockchain infrastructure.

This means that the business logic (backend code) is running on all nodes within a decentralized peer-to-peer network. Another variant to this concept is a frontend application which makes calls to a smart contract running on the p2p network. It is even possible to take this one step further and host the frontend code on decentralized storage such as Swarm or IPFS.

In the last few months, blockchain infrastructures like Tron , but also EOS and Ethereum saw a growing demand for DApps. According to DApp-statistics website DApp.review , there are currently 2558 active DApps being used by 205,302 users, generating a total volume of more than $32 million in 24 hours. Currently, 99% of this volume is linked to gambling and gaming related

According to Tron , they expect the demand for DApps to grow to many millions of users. In order to not fall into scaling issues, CEO Justin Sun is proactively building solutions to enable this growth.

Tagged Sun Network , the CEO detailed they are working on sidechain technology to solve the DApp scaling puzzle. The Sun Network is regarded as a layer 2 solution for Tron blockchain technology targeted at accomplishing 100X scalability.

Currently, the Sun Network consists of three stages to reach the expected DAppchain:

1. Tron DAppchain Testnet by May 30 with the main feature being: “Unlimited expansion supporting sidechain smart contracts, and increased security for sidechain assets providing extremely low costs.”
2. DAppchain official launch by August 10 with the main feature being: “Focus on strong decentralization and develop an active ecosystem of DAppchain users and developers.”
3. Optimization phase ends by September 15 allowing for a completed toolset which facilitates easy deployment and rapid integration of sidechains.

TLDR; What is Tron?

Tron focuses on expanding the market of decentralized digital content applications (decentralized applications) by making it easier to develop and deploy them. The noble idea of Tron is to cut out middlemen who connect creators to users as they are mostly responsible for demanding a large portion of the content creator’s revenue share.

To support the development of DApps, Tron has developed two smart contract standards called TRC10 and TRC20. TRC10 is actually a minimal configurable token which is in use since the ICO launch, however, the TRC20 standard is a new standard designed for Tron’s DApp ecosystem.

The TRC20 standard supports Ethereum smart contracts, enabling developers to make the big switch from Ethereum to Tron. Currently, TRC20 is highly configurable but requires a mediocre learning curve. More information can be found at developers.tron.network .

How does Sidechain Technology work?

The term “sidechains” was first described in the paper “Enabling Blockchain Innovations with Pegged Sidechains”, circa 2014 by Adam Back et al. The paper describes “two-way pegged sidechains”, a mechanism whereby proving that you had “locked” some coins that were previously in your possession, you were allowed to move some other coins within a sidechain.

Actually, a sidechain can be considered as a blockchain that runs parallel to the main blockchain and is connected via a simple two-way peg. This two-way peg is mostly defined as a special address that acts as a locked account for depositing tokens.

A user can decide to lock coins on this address and unlock the corresponding amount on the other chain. This process often makes use of simplified payment verification (SPV) proofs that proof you have locked up tokens in this address. The proof can be accessed by the other chain to verify your lock-up transaction. Actually, the idea behind SPVs is not new as it was already mentioned in the Bitcoin Whitepaper by Satoshi Nakamoto (section 8).

In a nutshell, SPV lets you validate your transactions without having to worry about anybody else’s transactions.

Benefits of Sidechain Technology?

First of all, the good thing about sidechains is that they are independent of the main chain. This means they take care of their own security, but also, if a problem occurs on the main chain, this doesn’t affect the sidechain and vice versa.

As a sidechain takes care of its own security, it needs to look for new miners or stakers. In the case of mining, the benefit is that miners can actually perform “merged mining” (or “dual mining”) meaning they can both mine on the main and sidechain at the same time.

This is only possible when both chains/currencies use the same algorithm. It’s not such a popular way of mining. In the past, we could find merged mining between Dogecoin and Litecoin (SHA256), or Bitcoin and Namecoin.

Merged mining is especially a benefit for the sidechain as it enjoys the larger mining power of the main chain to be exposed to its sidechain.

At last, sidechains allow for “optional hard forks”. According to the Sztorc consensus algorithm developed by Augur, this enables sidechains to allow ‘opt-in’ adoption of new features. Users can create their own sidechain and developed their preferred features on top of it while enjoying the same crypto, no need for a hard fork.

Other Sidechain Projects

Cosmos — Hubs & Zones

Cosmos has an interesting approach to sidechain technology by using hubs and zones. A Hub is a blockchain, and its main function is to act as a router for Zones. It supports routing of messages between Zones for interoperability and keeps a state of invariance for all blockchains connected to the Hub.

Whereas a zone is an independent blockchain that is capable of exchanging messages with Hubs. The zone is the core layer which is used by developers to build applications on top. A Zone is only aware of its own state and the status of the directly connected Hub. It doesn't need to know any info outside of its ecosystem as that’s the responsibility of the Hub using inter-blockchain communication (IBC).

The interesting part here is that all zones and hubs melt together as one liquid blockchain network, allowing for a lot of interoperability.

Other interesting information:

• Read about IBC Protocol .
• Cosmos uses Byzantine Fault Tolerance consensus by Tendermint .
• Develop with Cosmos SDK .

Cardano — First Sidechain Interoperability for PoW

Cardano wants to take sidechains one step further by creating 2-way pegged chains that allow the asset that is being moved to retain its nature.

The paper outlines how this can be constructed in the programming language of Solidity. It also mentions that the construction is possible on different blockchains, as long as they follow 2 underlying properties.

1. The first property is that the blockchain has support for NIPoPoWs (Non-Interactive Proofs of Proof-of-Work). This includes proof-of-work cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Monero.
2. The blockchain being targeted must be able to validate proofs . Therefore, any blockchain supporting smart contracts is sufficient.

Image source ResearchGate

The above explanation is only a brief overview of what IOHK’s research paper is about. The paper goes into great detail on the construction and implementation of sidechains via IOHK’s method. It is 20 pages long and filled with complex explanations, diagrams, and sophisticated algorithms.

More information:

• NIPoPoWs website with much deeper explanations.
• Explainer video by IOHK about Cardano and sidechains.