Cardano (ADA) Stated to Have Potential to Beat VISA with 1 million transactions per second via “Hydra ” Layer
This article covers Cardano ADA and the Hydra research paper announced by Charles Hoskinson. Learn more about the project on Wikipedia.
Key takeaways on Cardano ADA and Hydra
- The layer 2 solution “Hydra” will give the Cardano network a scalability of over one million transactions per second.
- The paper on Hydra was published yesterday and describes the isomorphic multiparty state channel.
Charles Hoskinson, CEO of IOHK, the company responsible for the development of Cardano (ADA), announced yesterday the publication of the research paper on Hydra. Hydra is a scaling solution for Cardano’s proof of stack, which is expected to be able to process over one million transactions per second.
Also, Hoskinson explained that the paper on Hydra is the result of a colossal effort. It involved over five years of research by more than two dozen full-time team members. The team originally completed the paper in November, with a conference paper submitted in mid-February. Since yesterday, the paper has been publicly available for everyone on ePrint.
What is Cardano’s Hydra?
As Hoskinson explained in his new video update, Hydra is a Layer 2 scaling solution implemented over Cardano’s Proof of Stake protocol, while fitting “very well with the Pool staking model”. It implements state channels that enable fast processing of payments and smart contracts beyond the blockchain (off-chain).
Next, simulations have shown that each “Hydra head” can currently process about 1,000 transactions per second (TPS). In addition, with 1,000 stacking pools, each of which processes 1,000 TPS, Cardano could achieve a throughput of up to one million transactions per second.
Also, Hoskinson emphasized that each “Hydra head” will reach the so-called “Fast Finality”. This means that a transaction can become irreversible almost in real time, as commonly used in a Byzantine Fault Tolerance (BFT) protocol. Finally, thanks to the “Fast Finality” and the high transaction speed, even micro-transactions will become possible, Hoskinson said.
The article on the Hydra Paper states that Hydra has other significant advantages over existing state channel solutions. For example, the Smart Contract Code of the first layer (“Layer 1”) does not need to be adjusted to be compatible with the scaling solution:
A serious disadvantage of the current protocols for layer two state channels is that the existing Smart Contract infrastructure and the contract code of layer 1 cannot be reused outside the blockchain without modifications. In this paper we introduce Hydra, an isomorphic multiparty state channel. Hydra simplifies the development of off-chain protocols and contracts by directly adopting Layer 1 Smart Contracts. We introduce the onchain contracts for opening and closing Hydra heads (our isomorphic state channel) and a novel offchain protocol for rapid head development.
Cardano ADA becomes the fastest system in the world
Hoskinson added that Hydra is compatible with all stages of Cardano Shelley, Goguen and Voltaire development. The reason is that it is a layer 2 solution based on Cardano’s Proof of Stake protocol. Hydra can also be combined with Sharding. This means that the basic protocol could already process 1,000 TPS, which will allow the developments of Shelley and Goguen. On top of that, Hydra can handle 1,000 TPS per stake pool, as Hoskinson stated:
The more heads you add, the more power you get. So if you look at the dynamics of the system in this way, we’re on a VISA scale in the basic ledger and comparable to our fastest competitor Ripple. And at the head level, we can scale to a global system that’s very natural and easy to shade. These heads can also be used for interoperability with other networks, such as the Bitcoin and Lightning network.
Hoskinson said the research is now complete and implementation of the code has begun. Meanwhile, IOHK is forming a Hydra team to code Hydra in parallel with the other stages of Cardano’s development. In addition, thanks to the work already done by Lightning Labs and other state channel projects, IOHK developers do not have to “start from scratch”.
Hoskinson closed the video update with the promising and combative words to competing projects by saying, Cardano will be the fastest system in the world.
Related reading on Creative Geniusess
- Cardano Implements Mary Hard Fork and Already has 1400+ assets on its Blockchain, on the Cardano Mary hard fork.
- Stake Pool GUIDE: How to Setup a Cardano (ADA) Stake Pool, a guide to stake pools.
- Cardano Daedalus Wallet TUTORIAL, on how to install, use and navigate the wallet.
