Cardano ($ADA) Development Company IOHK on Layer 2 Scaling Solution Hydra

Cardano ($ADA) Development Company IOHK on Layer 2 Scaling Solution Hydra

September 23, 2021

Recently, blockchain technology company IOHK (aka “IOG”), which is responsible for the research and development of the Cardano protocol, talked about Hydra, which is a layer 2 scaling solution for the Cardano blockchain.

In an IOHK blog post published on September 17, Software Engineering Lead Sebastian Nagel started by saying that Cardano “just like any permissionless blockchain, faces challenges when trying to scale to achieve the throughput required to support applications in the real world, including payment, identification, game, or mobile services.”

Nagel said that as Cardano achieves greater adoption, two concerns that need to be addressed are making sure that transaction fees do not become too high and that that transaction history does not become too large:  

Cardano transactions incur fees. The people who run the network (in the case of Cardano, the stake pool operator community) need to be rewarded appropriately for the part they play, so fees need to be set at a sustainable level. Users want to pay fees they deem acceptable.

In addition, the blockchain needs to be protected against Denial-of-Service (DoS) attacks, for example. Fees can therefore not be set so low as to open up undue risk – DoS events must be made prohibitively costly to a potential attacker. Storage is also a concern, as an ever-growing transaction history can lead to storage problems. Effectively, the most successful blockchains risk becoming ‘victims’ of that very success.

He then said that Hydra is “a layer 2 scalability solution that seeks to address all these concerns and aims to maximize throughput, minimize latency, incurring low to no costs, and greatly reducing storage requirements.”

Nagel went on to say that IOHK has already implemented a proof of concept prototype, that a developer preview should become available in the next few days, and that users could “expect to see a working prototype over a dedicated testnet, plus early benchmarking figures and documentation” in a GitHub repository.

He also mentioned that with Hydra “it is possible to achieve confirmation times of less than one second.”

https://youtube.com/watch?v=7ySUbFpTrAk%3Ffeature%3Doembed

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