What's the difference between sidechains and hardforks?

Question

What are the pros and cons of creating a new sidechain versus hardforking Cardano if making a variant is desired?

Does a sidechain have the same inherent security and as the mainchain thru stake pools? Forked tokens versus new sidechain tokens?

Example: If in the future Cardano Voltaire Governance Era, a tradeoff is made to decentralization, the reward equation, or new research is introduced, etc, a a party wants to create a new Cardano variant. Should the party decide to create a sidechain, or hardfork Cardano? Are they the same thing? What should be considered?

Answer 1

Sidechains and hardforks are definitely not the same thing.

As outlined in the original Why Cardano essay, the whole point of Layer 1 Cardano is to serve as a settlement layer for domain-specific computation performed by a collection of Layer 2 "sidechains". The explicit bifurcation of one settlement layer and many execution layers allows for much of the heavy computation to be spread out with domain-specificity.

The extent to which a sidechain inherits Cardano's security depends on how frequently and tightly they interact. Although there may be overlap, sidechains can and will have their own accounting models, consensus mechanisms, validator sets, e.t.c. Their "security" will depend on which of the many trade offs they've made.

So, the decision of whether to sidechain or hardfork depends on what you are trying to achieve. Are you trying to deploy some killer new execution/consensus/dApp engine? A privacy chain? Do you want smooth interoperability with everyone else's new chain? Go sidechain.

Or, do you want to make such radical changes to the settlement layer of all this infrastructure that the HFC and voltaire-era governance procedures are not enough? Then hardfork. (This is unlikely to be viable).

Answer 2

A sidechain is simply an alternate/secondary chain that shares a two-way link/peg with another chain that is the primary chain (frankly primary/secondary are philosophical roles that are interchangeable per case), to exchange messages and assets.

With that said, creating a variant of Cardano via a fork of the canonical chain from a point or a whole new chain/genesis block from the original codebase (with changes), doesn't automatically make that variant a sidechain of Cardano or inherit the security of the original Cardano network.

This is because A) bridge and relevant cross-chain protocols need to be deployed for interoperability as a sidechain.

B)security on the canonical chain is weighted in ADA stake which is tied to real world value and largely recognised by global actors. The variant will simply have a bunch of ADA tokens that do not in anyway reflect value of ADA from the canonical network. It will also lack the integrations and network effect of users and SPOs to solidify its place.

So a Sidechain is not a forked chain by default, and vice versa, but arrangements can be made to make a forked chain become a sidechain.

P.S. The whole point of Sidechains, starting from Bitcoin was about building alternate networks that communicated with the original network but had the flexibility to make/follow its own custom rules. This is the idea for sidechains on Cardano, where parties can build their own sidechains with their own rules should they feel misaligned for some reason or experimental.