Marathon announced their Anduro layer two proposal yesterday. While there aren’t really any fundamentally new pieces or developments in the Anduro design, they are put together in slightly different ways compared to other existing sidechain systems like RSK or Liquid/Elements.
Anduro is a federated model that uses a quorum, called the ‘Collective’ in the released documents. The main distinction between Anduro and other sidechain proposals is its explicit design based on the Collective that bootstraps and manages multiple sidechains with different architectures. This is not so different from the concept of drivechains which allows for a broader network of sidechains, rather than a single network.
Anduro will also be merged, which like RSK (also using a federated link) does not provide any kind of additional security for the bitcoin linked to the federation sidechain. However, like RSK, it provides POW protection for other assets that may be issued on the sidechain and not linked to the main chain and held by the federation.
Peg and consensus model
The actual link between the main chain and the side chain is fundamentally the same as that of Liquid, and in detail appears to be approximately identical in terms of structure and implementation. The Collective will launch with 15 members as Officers, the entities that actually handle the multisig keys involved in managing the peg, and 50 or more Contributors, who appear to be similar to Liquid partial members that are whitelisted can stand and initiate withdrawals from the side chain(s). ) even though they are not active participants in the processing of these recordings.
Like Liquid, Anduro will also use a formal organization to handle governance matters. That is, handling upgrades to the network, deciding on future changes to the federation’s membership set, and generally any issues that will arise regarding the operation of the sidechains that the Collective operates. The security of the federation ultimately depends on the diversity of jurisdictions to maintain any resistance to censorship or protection against confiscation of funds, even though a federation is composed of honest members.
The interesting part of the design here is that the Collective, unlike RSK, plays an active role in the consensus process, in addition to facilitating the operation of the peg mechanism. In Anduro, the Collective actually comes to consensus on the block content for the sidechain via a Byztanine Fault Tolerant (BFT) algorithm or round robin selection where a single member constructs the blocks for that round. They also periodically sign blocks to function as a checkpoint system to prevent rescheduling of anything from the historical past. Once signed and verified, miners are no longer able to reorder sidechain blocks without the help of the Collective.
Both factors essentially function as a firewall between Miner Extractable Value capabilities and the miners. MEV is any opportunity available to miners where rescheduling transactions, such as front running orders on a decentralized exchange, can provide an opportunity for that miner to earn additional income when they mine their next block. MEV has shown a tendency to increase centralization pressure for block producers in other networks in which it has become prevalent. Due to the fact that the Collective actually decides the content of sidechain blocks, and miners simply commit to them with proof of work, Collective acts as a shield against the centralizing pressure on block producers (in the case of Bitcoin miners) by taking the role to take from actual block construction.
In the long term, Marathon states that they plan to work on reliable peg mechanisms and consensus mechanisms, specifically citing BitVM as an example of how this could be feasible. While this calls into question the ability to maintain the MEV protections that the current architecture provides in such a transition, it currently prevents MEV from posing a risk of centralization pressure for miners. It is also important to note that ultimately, as designed with a prover-verifier model, BitVM inherently requires defined participants to manage all funds locked in a BitVM peg. While it radically improves the link security model by enabling demonstrable punishment of dishonest participants by a single member, massive changes to the design of BitVM itself would be required to completely eliminate the need for the equivalent of a federation.
Overall, the architecture strikes a nice balance between implementing a variant of existing sidechain designs, while the current iteration deliberately creates some kind of protective layers between the sidechains and miners when it comes to the risks of MEV.
The first two
At launch, Anduro will support two sidechain architectures, one based on Bitcoin and the other on Ethereum.
Coordinate: Coordinate is the Bitcoin sidechain variant. It will make minor changes to Bitcoin, including native support for asset issuance similar to Liquid, and plans to cater to Ordinals and token use cases like BRC-20, and the primitive DeFi products and services surrounding it built up.
Alys: Alys is the Ethereum sidechain variant, essentially just porting the Ethereum Virtual Machine and Solidity to a Bitcoin sidechain. The hope is that it can provide a new learning curve environment for Ethereum application developers so they can shift their focus to building services and tools on top of Bitcoin.
