In the blockchain space, Bitcoin has long served as the cornerstone of decentralized finance. However, as global demand for more diverse financial applications grows, Bitcoin’s native scalability andIn the blockchain space, Bitcoin has long served as the cornerstone of decentralized finance. However, as global demand for more diverse financial applications grows, Bitcoin’s native scalability and

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What is Side Protocol? A Guide to Bitcoin's New Financial Infrastructure

Jul 16, 2025MEXC

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In the blockchain space, Bitcoin has long served as the cornerstone of decentralized finance. However, as global demand for more diverse financial applications grows, Bitcoin’s native scalability and functionality have become increasingly limited. This is where Side Protocol comes in. Side introduces a revolutionary expansion solution to the Bitcoin ecosystem, empowering developers and users in new ways and helping BTC evolve into a truly global sovereign currency.

1. What is Side Protocol

Side Protocol is a Bitcoin scaling layer and the first dPoS (Delegated Proof of Stake) Layer-1 blockchain fully compatible with Bitcoin. It is designed to lead the future development of Bitcoin finance by combining Bitcoin’s security with the scalability of high-performance networks, providing a new infrastructure for decentralized application (dApp) development. Side Protocol aims to attract billions of users worldwide and help BTC become a globally recognized mainstream currency.

Core features of Side Protocol include:

Fully compatible with Bitcoin assets, enabling BTC to circulate without cross-chain bridges.
Utilizes a dPoS consensus mechanism to ensure efficient, secure, and scalable on-chain governance.
Modular architecture that supports flexible scalability, making it easier for developers to build diverse applications such as DeFi, payments, and asset management.
Bitcoin-centric internet infrastructure designed to serve billions of users globally.

With Side Protocol, Bitcoin evolves from merely a store of value into a foundational force behind a comprehensive financial ecosystem.

2. What is the SIDE Token

Within the Side Protocol ecosystem, while BTC serves as the primary asset across all products, SIDE is the native utility token of the Side Protocol and plays a critical role in the network. Its main functions include:

2.1 Value Capture Mechanism

As the financial expansion layer for Bitcoin, Side Protocol features a clear revenue model. Fees generated from products such as Side Finance, Side Chain, Side Hub, Side Bridge, the native DEX, and future applications are used by the protocol to regularly buy back and burn SIDE tokens. This deflationary mechanism steadily increases the scarcity and value of SIDE.

2.2 Transaction Fee Payments

On the Side network, in addition to BTC, users can choose to pay transaction fees with SIDE tokens. All network operations (such as transfers and contract executions) incur fees, which are used to reward node participants and to prevent spam transactions and denial-of-service attacks, ensuring the network remains secure and stable.

2.3 Staking and Network Security

Side Chain is a critical component of the Side Protocol architecture, operating on a permissionless Proof-of-Stake (PoS) mechanism with native delegation support. Users can delegate their SIDE tokens to validator nodes to earn staking rewards while actively contributing to the network’s security and operational stability.

2.4 On-Chain Governance

Holders of SIDE have the right to participate in decentralized protocol governance. This includes voting on major network decisions such as protocol parameter adjustments, system upgrades, and treasury fund allocations. Through SIDE tokens, the community gains real control over the future direction of Side Protocol.

3. How to Obtain SIDE Tokens: Airdrop and Allocation Ratio

As early as November 2024, Side Protocol launched its Genesis Drop event—the first token distribution initiative aimed at rewarding early users, builders, and partners.

According to official information released by Side Protocol, the event airdropped a total of 100 million SIDE tokens. The specific allocation ratios are shown in the table below:

Category	Allocation Ratio	Criteria	Notes
Active Bitcoin Users	30%	Past network fee expenditure > 0.005 BTC	Capped at 50,000 addresses, 600 SIDE per address
NFT Community Members	10.50%	Invited members of NFT communities	Covers BTC, Cosmos, Solana, and Ethereum ecosystems
ATOM Stakers	15%	Users who staked ATOM in the Cosmos ecosystem	Includes Hydro users
Testnet Insiders	32%	Users who completed testnet tasks and submitted addresses	Divided into 11 reward tiers, no FCFS restriction
Validators & Bridge Operators	Designated Rewards	Actively participated in testnet node and cross-chain bridge operations	Must communicate via Discord, manually distributed
Public Goods Contributors	1%	Participants supporting AEZ public goods projects	Includes DoraHacks donors, voters, and DORA stakers
Social Event Participants	5%	Social whitelist events	Details forthcoming

Side Protocol is redefining the possibilities for Bitcoin's on-chain applications. At the heart of it all lies the SIDE token: a core force that not only represents governance and participation rights within the network but also carries significant potential for value growth. The Genesis Drop is more than just an airdrop; it's an opportunity to become an early builder in the Side ecosystem.

As the first dPoS Layer 1 blockchain fully compatible with Bitcoin, Side Protocol not only expands Bitcoin’s application boundaries but also builds a high-performance, secure, and decentralized financial infrastructure for users worldwide. With mechanisms such as value capture, network incentives, and governance empowerment, Side is creating a vibrant and scalable ecosystem with long-term growth potential.

Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, consultation, or any other related services, nor does it constitute advice to purchase, sell, or hold any assets. MEXC Learn provides information for reference purposes only and does not constitute investment advice. Please ensure you fully understand the risks involved and exercise caution when investing. MEXC is not responsible for users' investment decisions.

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