Additional Features
Last updated
Last updated
sBTC is a native token on the Side Chain, fully pegged 1:1 to BTC held on the Bitcoin mainnet. While Side Protocol’s long-term vision focuses on leveraging the Discreet Log Contract (DLC) framework to create trust-minimized dApps for Bitcoin, sBTC introduces a threshold-based BTC bridging solution.
sBTC unlocks new use cases for more trust-tolerant users, providing a more accessible and flexible entry point into the Side Chain and broader IBC-enabled Cosmos ecosystem.
The initial version of Side Bridge supports cross-chain transactions between BTC and all Runes, and users can currently test this feature on Side Hub and explore history transactions on Side Station.
Note: Side Bridge is a solution designed for trust-tolerant users. For those seeking a more trust-minimized experience, they can explore other non-custodial products that Side Protocol offers, including the DLC-based lending system , which is introduced in previous sections.
Fast and Low-Cost Transactions: sBTC enables transactions on the Side Chain with instant finality (within seconds) and significantly reduced fees compared to the Bitcoin mainnet, providing a practical solution for frequent transactions.
Simplified Gas Fee Model: Users can pay transaction fees directly with sBTC, eliminating the need to hold the network’s native SIDE token. This makes sBTC adoption easier and more intuitive for Bitcoin users.
Bitcoin-Native Address Compatibility: The Side Chain uses address formats identical to Bitcoin’s mainnet, including Taproot and Native SegWit, and allows transactions to be signed directly with Bitcoin wallets. This seamless integration ensures a familiar and secure user experience for Bitcoin users.
IBC Compatibility: In addition to Side Chain, users can utilize sBTC on any IBC protocol-enabled networks.
sBTC stands out as it is issued on the first fully Bitcoin-compatible dPoS Layer 1 blockchain. Unlike other threshold-based BTC bridging solutions deployed on networks that rely on EVM addresses and require native tokens for gas, the Side Chain delivers a user-centric approach tailored specifically for Bitcoin users.
The system leverages a Bitcoin Light Client for pegging in and a Threshold Signature Scheme (TSS) witness model for pegging out. Below is a high-level description of the design and its key components.
Relayer
The relayer facilitates trustless communication between the Bitcoin network and the Side Chain by relaying Bitcoin blocks and bridge-related transactions. Its key responsibilities include:
Syncing Bitcoin block headers to the Side Chain to update the Bitcoin Light Client.
Relaying transactions to mint synthetic assets on the Side Chain.
Broadcasting peg-out transactions signed by TSS signers to the Bitcoin network and syncing these transactions back to the Side Chain to unlock the locked UTXOs.
The fee provider supplies the latest Bitcoin on-chain fee rates required for withdrawal requests during the peg-out process.
Periodically submits the up-to-date Bitcoin fee rate to the Side Chain.
Operates under on-chain governance authorization.
TSS signers are the core participants in the cross-chain bridge.
The TSS network consists of 21 selected Side Chain validators and employs a threshold signature scheme, ensuring reliable functionality as long as at least 15 validators remain active. The operators of the TSS network are carefully chosen from reputable entities within the validator space, with proven track records of managing billions of dollars in stakes across other networks..
These signers co-sign withdrawal transactions in a distributed, trust-minimized manner.
Initialization: The Bitcoin Light Client is initialized using a publicly known and trusted Bitcoin block header at genesis.
Update: Relayers consistently submit block headers, which are validated on the Side Chain.
Reorganization (Reorg): A reorg occurs when a new block header does not match the current best block header on the Side Chain. For security, the reorg depth is restricted within an acceptable scope (i.e., the safe confirmation number).
Once the Side Chain is operational, an on-chain DKG proposal will be initiated to generate the necessary vaults for asset escrow.
The DKG procedure is conducted by the TSS network.
Users transfer BTC to vault addresses generated by the TSS network.
Once the transaction reaches the required confirmation threshold, relayers submit it to the Side Chain.
The mint operation is executed upon successful verification of the transaction. A small protocol fee is collected at the same time.
After minting, the related Bitcoin UTXOs are stored for building peg-out transactions.
Users initiate withdrawal requests on the Side Chain by burning the corresponding assets. A protocol fee is collected.
Withdrawal requests are grouped into signing requests every N blocks. The signing request is an unsigned PSBT built from on-chain UTXOs.
The TSS network fetches and signs the pending signing requests.
The signed Bitcoin transactions are broadcast to the Bitcoin network by relayers and submitted to the Side Chain to update the status of the corresponding signing requests to broadcast.
The peg-out transactions are relayed back to the Side Chain to unlock UTXOs for later use.
The bridge signers are selected based on their credibility, prior experience in operating bridge infrastructure, reputation, alignment of interests with the project, commitment to the Side ecosystem, past contributions to Side, technical expertise, and more. Additionally, all bridge operators have completed KYC/KYB processes. Below is the list of selected signers. Changes to the signers can be made through governance.
