if the scBTC can take advantage of faster tx times, why not?
miners would like it too as they'd get all those sources of income, tx fees from scBTC and sidecoin, as well as block rewards of sidecoin.
Because users have no interest for a sidechain with an additional sidecoin. Users will go for the more safe, most risk-averse chain which is the scBTC 1:1 peg model but the SC would be MM. just like Namecoin is today with 70% of the Bitcoin hashrate.
Only largely accepted and used sidechains will be mined because only those will have value. As I've stated many times, miners will not MM speculative coins or other obscure schemes that gain little traction, there's no incentive for them to do so.
A sidechain using both scBTC and issued assets (sidecoins) for whatever reason is simply inferior to the superior scBTC 1:1 chain. To serve monetary functions ex: faster transactions, the appSidechain or as I have called them, utility chain, is simply the more logic choice.
Agreed, a sidechain that is inflationary (by creating additional sidecoin issued assets) will not be functional because it breaks the store of value property. For such sidechains, the scBTC value in equivalent BTC will decrease over time making it so no one wants to hold the coin. And if no one holds the scBTC coins, the functionality of the sidechain is greatly reduced.
Let's take a zerocoin sidechain example. Suppose someone created an scZerocoin that enabled completely anonymous transactions and a method to safely mix coins. That is very useful functionality people are interested in. However this scZerocoin sidechain was designed to also mine sideZerocoins, which break the 1:1 transfer and cause scZerocoin assets to decrease in BTC value over time.
The problem is people are now incentivized to minimize the length of time they hold scZercoin's to as short of a time period as possible. i.e. convert BTC to scZerocoin, make anonymous transactions, then convert scZerocoin back into BTC as soon as possible. However this behavior also greatly reduces the zerocoin sidechain's functionality since: 1) there are very few other people to mix with at any given time since no one wants to hold the asset, 2) quickly withdrawing coins quickly reduces anonymity. The only way to correctly use this coin is to hold it for a reasonable period of time, but doing so causes a loss in BTC.
Such a sidechain will always lose to another implementation that guarantees a 1:1 peg by producing no sidecoin issued assets from MM. Here if someone else created scZerocoinV2 with 1:1 pegging, everyone would immediately switch and also potentially hold the scZerocoinV2 coins for lengthy periods of time.
What this means is any SC will need to be supported by transaction fees only, not speculative sidecoins generated. And as a result miners will only be interested in MM widely used SC that generate a reasonable amount of transaction revenue. Yes any SC can be MM, but there are costs on the server side and lightly used SC's with very few transaction fees won't be worth it.
Another important point is the sum total value of the Bitcoin mainchain and ALL sidechains combined will always equal 21M coins maximum. Even if there are billions of SCs created, the sum total value of all them is only the equivalent BTC that have been converted over and are available to convert back. If some SC's are inflationary, that action simply reduces the value of their own sidecoin assets, and the BTC equivalent value remains the same.
I haven't had time to go over the 100+ pages on the topic recently, but a lot of the concern seems to be that billions of SC's will be inflationary to the Bitcoin ecosystem and reduce the store of value aspect. I simply don't buy this because their cumulative BTC equivalent value will always remain the same and within the 21M cap.
