New Feature: Routing

What’s the Problem?

Right now on Mainnet Alpha, users can peg in and out between the Bitcoin network and Side Chain (the Side Protocol blockchain) seamlessly.

But sBTC isn’t just meant for Side Chain. Our vision is for sBTC to move freely across any chain that speaks IBC.

Currently, to move sBTC beyond Side Chain, users have to handle the bridging process themselves. This adds friction and makes it harder for apps on other chains to adopt sBTC.

The Solution: Routing

Routing is a new protocol-level feature that turns Side Chain into a relay layer, allowing users to move sBTC across chains automatically, without needing to touch Side Chain directly.

Example:

• A user pegs in BTC and chooses Cosmos Hub as the destination. They include their recipient address (e.g., cosmos1xyz…) in the transaction.

• After the peg-in completes, they receive sBTC directly on Cosmos Hub — no manual bridging (from Side Chain to Cosmos Hub) required.

It also works in reverse:

• If a user wants to peg out from Cosmos Hub to Bitcoin, they can trigger it from Cosmos Hub itself and receive native BTC directly on the Bitcoin L1 — without ever interacting with Side Chain manually.

What Does This Unlock?

Native BTC Swaps Across IBC!

Imagine swapping native BTC for ATOM on Cosmos Hub via Osmosis or Stride DEX — in just a few clicks.

With Routing and IBC integration, sBTC becomes instantly composable across chains. By leveraging cross-chain swap aggregators like Skip:Go, the user experience will become seamless:

Routing makes sBTC far more composable and opens the door to powerful use cases like:

• Native BTC yield strategies

• Interoperable BTC DeFi across IBC-connected chains

• More…

How Routing Works

Here’s a quick breakdown of how Routing works under the hood:

• Peg-in: The user sends native BTC to the sBTC vault with an OP_RETURN output that includes IBC metadata — specifying the IBC channel and the recipient address on the target chain.

• Peg-out: When an IBC transfer is initiated from a chain like Cosmos Hub, the IBC memo includes bridging instructions. Side Chain reads these instructions via a custom IBC hook and automatically completes the peg-out — sending native BTC to the recipient.