Cardano’s ‘Hydra’ upgrade aims to supercharge blockchain scalability, powering enterprise use cases and Defi

SEP 19, 2021

Input Output Hong Kong (IOHK) says it’s developing a layer-2 upgrade for Cardano’s blockchain after the crypto’s mainnet was updated last week.

Cardano founder Charles Hoskinson tells his 690,000 followers that a new venture called “Hydra” is in development on the new Alonzo hard fork to improve aspects of scalability and storage.

David Orr of IOHK explains that while they plan to improve Cardano fees in order to balance user costs, stake pool operator rewards and network security, they likely won’t be low enough for “real world use cases,” which is what Hydra intends to address.

“Hydra is a layer-2 scalability solution that seeks to address these concerns by providing more efficient means of processing transaction off-chain for a set of users while using the main chain as a secure settlement layer…

Hydra maximizes throughput, minimizes latency, incurring low-to-no cost, and greatly reduces storage requirements.”

Orr says that Hydra can lower the barrier to entry for customers wanting to build things on the Cardano network like wallets or applications.

IOHK says that Hydra could make transactions on Cardano’s blockchain take less than one second to complete.

“Terms like ‘one million TPS (transactions per second)’ have been used before. It is a bold number, and while this remains as an aspirational target, the ultimate goal of any system is the flexibility to grow capability with demand… In principle, by adding increasing numbers of Hydra heads to the system, arbitrarily high throughput can be achieved by the system as a whole.”

ADA is trading at $2.38 at time of writing, according to CoinGecko.