It seems a lot of interesting changes are coming to Ethereum Classic in the very near future. Similar to other cryptocurrencies, this particular altcoin wants to improve its scalability. To do so, it’s looking toward the integration of a sidechain known as Callisto. This is a separate blockchain which will have its own currency known as CLO. It certainly introduces a lot of exciting changes which will help catapult ETC to new heights in the future.

Ethereum Classic Prepares for Sidechain Integration

When it comes to scaling, a lot of cryptocurrencies are struggling quite a bit. Bitcoin is a good example of this struggle, as the network has been far from perfect or fun to use these past few months. Mounting transaction fees and growing confirmation delays have been problems for quite some time now. The developers of Ethereum Classic wish to avoid these issues with the help of a sidechain protocol, rather than an on-chain block size increase a la Bitcoin Cash.

More specifically, it seems this sidechain will be known as Callisto. Although the name is interesting, it is by far the least important aspect to remember right now. This sidechain will be implemented as a way to research and provide a reference implementation of future protocol changes. ETC also has smart contracts, but the developers want to create an on-chain governance system for this technology. Additionally, they aim to introduce a financially transparent, built-in development funding mechanism. On paper, it all sounds rather exciting.

Furthermore, Callisto will help improve the scalability of both Ethereum Classic and this new network at the same time. Implementing cross-chain service improvements is another item on the roadmap. In theory, it will become possible to use Callisto smart contracts on the ETC chain and the other way around. This is all assuming that this implementation comes to fruition in the near future and that it works as advertised. There is still a lot of work to be done in the coming months.

Under the hood, Callisto will be both a separate blockchain and an Ethereum sidechain. The native currency of Callisto is known as CLO, which has a fixed cap similar to Ethereum Classic. This new currency is also a way to introduce the “cold staking protocol” which rewards coin holders for being a part of the network. This staking process is based on smart contract technology, which is an intriguing change of pace. Moreover, CLO holders will earn interest for holding coins for longer periods of time.

Unlike most other currencies with a staking option, there is no need to run a network node whatsoever. Nor do these stakers validate transactions, as everything is taken care of by the smart contracts. Whether or not this method of cold staking will gain any major traction remains to be determined, though. It is a step toward automating the future on-chain governance system implementation. It’s good to see cryptocurrency developers come up with new ways of tackling existing problems.

The issuance of CLO will occur once the Ethereum Classic blockchain hits block height 550,000. At that time, a snapshot of the Ethereum Classic blockchain will be taken. Every Ethereum Classic holder will receive 1 CLO for every ETC they own at the time of the snapshot. In that respect, it is similar to most of Bitcoin’s recent hard forks. However, this particular chain will have more than one valid purpose and will open up a lot of new exciting opportunities. It will be interesting to see how the Callisto project pans out, but so far, it looks rather intriguing.