For what it's worth, I wish @aggroed should stop cussing you out. But I've never heard him do that. So what do I know?

The "p2p" on hive-engine is the best you can hope to do with a system like this.

Normally, a blockchain needs to balance censorship resistance with decentralization with cryptographic integrity.

But a sidechain only needs to worry about the last one. Censorship resistance is handled by the mainnet. The decentralization that matters is also handled by the mainnet.

Any custodial concerns on the sidechain would be just as much a concern as they would be on the mainnet, if the mainnet supported any kind of custodial system at all, which it doesn't.

But in theory, if there was an SMT for dealing with pegged assets, they would likely be just as custodial as they are on the sidechain. That would not undermine the mainnet's status, would it?