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A sidechain is a separate blockchain that is attached to a parent blockchain using a two-way peg. This connection allows assets to be interchangeably transferred between the main chain and the sidechain at a predetermined rate. Sidechains operate independently, with their own protocols, rules, and block parameters, but they enhance the capabilities of the main chain by offloading transactions and computations.

This can lead to improved scalability and the addition of new features or testing of experimental changes without affecting the main blockchain. Sidechains are used for various purposes, including enhancing privacy, smart contract functionality, and more efficient transaction processing.