This is a type of blockchain network architecture where multiple separate blockchain networks operate in conjunction with each other while maintaining their own independence and autonomy.

Sidechains allow for interoperability and the sharing of data between the separate chains.

In a federated sidechain setup, a group of pre-selected nodes (known as "federated nodes") act as intermediaries between the separate chains, enabling cross-chain transactions and communication. The federated nodes are responsible for ensuring the integrity and security of the network.

This architecture provides greater scalability, privacy, and customization compared to a single, monolithic blockchain network.

From a cryptocurrency perspective, sidechains provide a way for businesses and organizations to create their own digital currencies and assets, while still being able to access the larger network and its resources.

This enables the creation of custom financial solutions that can be tailored to specific use cases, while still leveraging the security and decentralization of the broader network.

Examples of Live Operational Sidechains