Ever since the inception of blockchain technology, scalability has been a top concern and challenge faced by most blockchains. As Cardano (and other layer ones) continue to gain adoption and become the underlying infrastructure for most applications, they’ll need to handle higher transaction volumes while maintaining fast settlement speeds.
To handle such transaction volumes in the range of millions, Cardano introduced the Hydra Protocol to solve this issue by handling transactions off-chain. In this article, we look into some key aspects of the Hydra Protocol; using the game Doom as an example of how Hydra can enhance blockchain scalability.
What is the Hydra Protocol?
The Hydra Protocol is a layer-2 scaling solution for Cardano. It aims to increase the speed of transactions (low latency, high throughput) and minimize transaction cost while maintaining security. The protocol is rooted in peer-reviewed research and uses isomorphic, multi-party state channels to achieve its goals.
Hydra operates by creating off-chain ledgers known as Hydra Heads. These heads are mini ledgers shared between a small group of participants. Transactions within these heads are processed off-chain, which significantly reduces the load on the main blockchain.
Many transactions and arrangements can occur within a single Hydra head, with only the final outcome recorded on the main chain. The protocol facilitates frictionless state transfer between the main chain and individual heads. Once all transactions are complete, the results are settled on the Cardano mainchain. This helps maximize throughput, minimize latency, incurring low to no costs, and greatly reducing storage requirements.
Below is a snapshot demonstrating how Hydra heads are built as a layer 2 solution on top of Cardano’s mainchain.
If you’re new to Hydra and would like a deeper introduction into how the Hydra heads protocol enable linear scalability of the Cardano blockchain, check out these articles we published a while back:
- IOHK Presents Hydra: A Scaling Solution for Cardano
- The Hydra Protocol — Scaling and Network Optimization for the Cardano Blockchain
Key Features of the Hydra Protocol
- High throughput: Hydra replicates transactions aiming protocol participants to reduce data processing and achieve high transaction throughput, with tests showing the ability to handle millions of transactions per hour.
- Cost efficiency: By processing transactions off-chain, Hydra reduces transaction fees, making it more cost-effective for users. With the low processing needs by protocol participants and configurable protocol parameters, it’s possible to achieve zero-fee use cases
- Security: Despite being off-chain, Hydra maintains rigorous security standards to ensure the integrity of transactions.
- Isomorphism: Transactions within Hydra Heads have the same transaction format and ledger rules as those on the main chain, ensuring consistency and ease of integration.
- Flexibility: Hydra supports various use cases, including payments, gaming, and marketplaces, making it a versatile solution for developers.
Who can leverage Hydra?
Cardano’s Hydra Protocol is still inactive development and testing, with ongoing efforts to refine and improve its performance. The protocol is accessible for developers and end users alike, requiring minimal changes to existing applications to integrate with Hydra Head. Worth a mention is that Hydra isn’t a network upgrade; it’s not like flipping a switch on Cardano to make it fast – instead, applications need to adopt and build on Hydra heads to benefit from it.
While both end users and developers can build on Hydra, it’s important to note that only Hydra Head protocol version 0.10.0 or newer is compatible with the Cardano mainnet. This means it’s possible to run a hydra-node on Cardano mainnet using real funds. Operating a Hydra node requires a deep understanding of the underlying infrastructure to avoid risking your funds if unfamiliar with the implementation and usage processes. For a deeper understanding of the known issues, limitations, and possible consequences, check out official documentation.
Hydra Launches Gaming Test Campaign With Prizes Worth $100K
Ever thought you could ever run Doom on Cardano? With Hydra technology, its now possible – a clear demonstration of the power and speed of transactions that can be processed on Hydra.
Hydra enables Doom to run on Cardano’s blockchain by leveraging its off-chain computation capabilities. Hydra heads act as isolated environments where complex operations, such as rendering game frames and validating game logic, can be performed without the main blockchain’s restrictions. The deterministic nature of both Cardano transactions and Doom’s engine ensures that game states evolve consistently. Inputs from players are validated through smart contracts in Hydra, preventing cheating and maintaining game integrity. This innovative use of Hydra demonstrates the potential for scaling decentralized applications – a simple illustration of what’s coming and the potential Hydra holds in scaling Cardano.
The recent launch of a gamified test campaign, dubbed the Hydra Doom Deathmatch, aims to push Hydra’s limits and engage the community in testing its capabilities. The Tournament will kick off on December 3, 2024, with 100,000 USDM in various prizes up for grabs. The initial qualifier will be played against bots with further elimination rounds between December 8–18. Player vs. player rounds will follow with an in-person finale in January.
You also have an opportunity to contribute to the Hydra Doom Cardano Map to be used during the tournament. Here, you can unleash your creativity by creating monster details, power-ups, custom textures and many more assets. Submit your custom design and leave your mark on Hydra Doom history.
For more information and updates regarding the Hydra Doom Tournament, check out doom.hydra.family.
Putting it all together
The Hydra Protocol represents a significant step forward in addressing blockchain scalability issues. By leveraging off-chain ledgers and isomorphic state channels, Hydra provides a solution to enhance transaction speed, reduce costs, and maintain security. As Cardano continues to develop and test Hydra, it’s growing ecosystem, including DeFi projects and smart contracts, will greatly benefit from Hydra’s ability to process more transactions without congesting the main blockchain.
As an open source project, Hydra is open to contributions from researchers, developers, and blockchain enthusiasts looking to advance decentralized technologies. You can get involved in the continuous improvement of Hydra protocols through community discussions on Discord, code contributions on GitHub, issue reporting, month demo and review sessions, and much more. Additionally, you can also follow through the Hydra working group, a forum that focuses in the future of Hydra and related scaling projects in this Intersect technical working group.
