Sidechains are independent blockchain networks that operate alongside a main blockchain. They are connected to the main blockchain through a mechanism called a two-way peg, which allows assets and data to move between the two chains securely. By processing transactions separately, sidechains help reduce congestion on the main blockchain, leading to faster and more cost-effective transactions. Additionally, sidechains can have their own rules and features, enabling developers to experiment with new ideas without impacting the main network.