A Secure Sidechain for Decentralized Trading in Internet of Things

Sidechains allow transaction dissemination and execution outside the blockchain main network (i.e., the mainchain), enabling a scalable, efficient, and secure financial infrastructure for the Internet of Things (IoT) without trusting any central authority. Existing sidechains either have online requirements or rely on intensive computation on a central operator, which does not meet the needs of IoT for dynamic changes and high performance. This paper proposes an alternative sidechain construction, called Cumulus, which meets the needs of IoT by leveraging the classic Byzantine fault-tolerant (BFT) consensus protocols such as PBFT that have commonly been applied in permissioned blockchains. Cumulus builds BFT-based sidechains atop public blockchains (e.g., Ethereum) using smart contracts and ensures the bidirectional safety of users’ assets. Cumulus sidechains periodically interact with the mainchain and submit checkpoints through representatives selected in an efficient and decentralized manner. The experiments show that Cumulus sidechains outperform rollup-based sidechains, and state-of-the-art sidechain constructions, achieving two and three orders of magnitude improvement in throughput and latency while retaining comparable operational cost.