...every coin on Alpha is 100% backed by a locked coin on testnet, and using the peg mechanism you can swap a testnet coin on Alpha for one of its backing coins on testnet.
Could you show the code on how alpha does this? As per my knowledge, since the bitcoin blockchain cannot be monitoring a sidechain, the way to unlock the coins on mainchain is through a third party federation, the sort of group RSK is building & the technique they plan on using. It would be really useful, thanks.
Alpha is using a third-party federation which processes peg-outs (though the details of this are purely mechanical, it is not too hard to write software that verifies that the federation is doing exactly what it is supposed to and no more). Peg-ins are done by Alpha's consensus code, though I don't know the details of this well enough to point you to the code.