Hydra scaling solution could enable micropayments on the Cardano network
Hydra, a scaling solution for Cardano, will be one of the Key components for the evolution of Layer 2 ADA. This is a “family of protocols” called Hydra Head that provides the foundation for building on-chain scalability.
Hydra Head is a miniledger off-chain that works similarly to the main ledger, but between a small group of participants.
Taking advantage of this scaling solution, Cardano and Obsidian Systems they have presented Hydra for Payments, an open source tool for developers who want to implement New payment systems and micropayments in the Cardano ecosystem.
The use of Hydra Head will simplify the development of solutions for payments, particularly unlocking the potential for the creation of micropayment tools, something necessary for the Cardano ecosystem.
In this way, developers will have a set of open source tools with which to develop light wallets, who can take advantage of Hydra's benefits to create products that meet user needs while reducing development costs and improving Cardano's performance.
Layer 2 solution tools are will be progressively unlocked, as user needs grow. This way, they will be able to manage credentials, manage the Hydra Head lifecycle, and interact through a common and simple interface.
What is Hydra? This is Cardano's layer 2 scalability solution
Alonzo's implementation implemented the creation of smart contracts and decentralized applications (DApps) on Cardano.
Alonzo marked an important milestone in the history of blockchain, as it allowed for improved innovation and development. The upgrade was the start of one of Cardano’s most interesting developments; Hydra.
Hydra is a scalability solution Cardano's Layer 2 blockchain. It aims to improve network performance by overlaying a new protocol on top of the existing Layer 1 blockchain.
Layer 2 solution for Cardano
Like any blockchain permissionless, Cardano faces several challenges when trying to scale and get the performance you need to support real-world applications including payments, identification, gaming, or mobile services.
This is because these blockchains need reach a “global consensus” in each and every transaction. In the case of CardanoThis is achieved through the Ouroboros consensus algorithm, a type of Proof-of-Stake built on a more efficient algorithm.
Cardano, like any PoS network, has commission fees. These fees are because the blockchain must reward all the people running the validator nodes for their work. Users pay a fee and this goes to the validators.
In this sense, blockchains must find a balance between what the user wants to pay and what must be paid to keep the blockchain secure. Fees that are too low could pose a risk and lead to denial of service attacks.
Hydra seeks to offer a solution to all these problems, while Optimize Cardano Performance, reduces latency, reduces costs and also minimizes storage requirements.
Isomorphic scaling
Hydra processes transactions off-chain for a small set of users, but uses the main chain ledger as a secure settlement layer. This way, security is maintained while reducing dependence on the main network.
As it does not require a global consensus, Hydra can be adapted to a wide range of applications. For example, Hydra allows transaction fees and minimum UTXO value to be set from 1 or 2 lovelaces, something fundamental for create micropayment systems.
One of the key points of Hydra are the so-called “isomorphic state channels”. This involves reusing the same representation of the ledger to produce “clones” of it off-chain, which are called “heads” or “Hydra Heads”.
This means that native assets, NFTs, and Plutus scripts are available inside each of these heads, off-grid. This offers a natural extension of the Cardano system.
This system lowers the barrier to entry to Hydra for customers, both potential and existing, who can use the infrastructure to build layer 2 applications. At the same time, they can create a Hydra head without upfront funding, making the user experience easier.
Hydra in the future
The team intends to continue developing Hydra with the goal of offering faster settlements and low-cost transactions. They are also working on new features such as Multiple head support per node, persistence and extensions of the heads.
The feasibility of is also being studied. connect multiple heads to increase the reach of the layer 2 solution, as well as the development of “virtual heads”, running the protocol of the heads inside other heads, taking full advantage of isomorphic capabilities, which, according to the Cardano team, is where true scalability lies.
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