maybe we're having a definitional misunderstanding? as i understand it "sidecoin", as you've termed it, is an independent coin that can only be produced on the SC thru mining SC blocks for reward. it cannot be interchanged with scBTC which is derived from BTC as a result of the 1:1 peg. and sidecoin can't travel thru the peg into the MC. in this scenario, i envision both travelling securely within the SC, both being secured by MM or direct mining. they will both be mined for tx fees on the SC and both can take advantage of faster tx times.
is this technically accurate and possible? b/c if it is, then Bitcoin will die. if it's not, then your argument is strengthened altho i still see problems.
!!!
yes it is possible.
but address this question : is this desirable for the user? why would I use a sidechain that issues sidecoin if I can use a sidechain with the exact same feature that works only with the 1:1 peg. who would use the "sidecoin" when he has the option of the risk free put of the scBTC
as a user and a miner myself, who is losing money mining btw, i would use this SC for 2 reasons; faster tx times for my scBTC thru the peg
and because it's protected by the risk free put AND i would mine the SC either thru MM or directly b/c of the
added revenue of sidecoin block rewards and the associated tx fees.
this is called greed in action.
edit: AND as a speculative bet on the sidecoin appreciation.