IOHK, the developer behind the Cardano network, has announced a new solution for the network. After introducing smart contracts on the network, it moved on to other projects to ensure that the network met all of its developers’ needs. This has been shown in the latest version from the developer called Hydra.
The Cardano hard fork brought the possibilities for more development to the fore. Even though developers outside of the main Cardano project develop their own solutions and protocols that run on the network, IOHK continues its work to make the network more scalable and more secure for its users. This is why the release of the Hydra Layer 2 solution is important to the ecosystem.
Layer Hydra over the existing Layer 1 blockchain
Hydra is a Layer 2 blockchain solution that runs on top of the existing Layer 1 blockchain on Cardano. Hydra uses isomorphic state channels that basically use the same ledger representation over and over to provide unified ledger siblings out of the chain. These are called heads by the developers. This pushes things like NFTs, native assets, and Plutus scripts straight into a Hydra Head, which basically acts as an extension of the current system.
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This Layer 2 solution provides the much-needed scalability required for high-usage networks to maintain the required throughput for blockchain-based applications. Hydra will work side by side with Cardano’s existing Layer 1 solution to provide a smooth user experience.
Why Hydra is important to Cardano
As things like decentralized finance (DeFi) find their way into the Cardano ecosystem, it is imperative for the network to provide appropriate fee structures and security on the blockchain. This is where Hydra comes in. The Layer 2 protocol will not only help scale the network, it will also help bring fees down to sustainable levels. This takes the form of establishing a fee structure that is acceptable to both the stake pool operating community, as Cardano works with evidence of stake and fees that users deem acceptable.
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Hydra will help keep these charges low enough to not be a problem for their users, while preventing charges from being low enough to encourage denial of service (DoS) attacks.
As transaction history grows on the Cardano network, storage becomes a problem over time. A Layer 2 solution like Hydra will alleviate these problems in the future.
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“Hydra is a Layer 2 scalability solution that addresses all of these concerns and aims to maximize throughput, minimize latency, have low to no cost, and significantly reduce storage requirements.”
More information on Hydra will be available at the Cardano Summit, scheduled to take place September 25-26, 2021.
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