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Cardano’s Hydra: L2 scalability solution launch timing, details after successful SundaeSwap demo lifts ADA

By Raphael Sanis

Edited by Charlie Mellor

09:46, 19 October 2022

Represenation of a cardano token in front of a candlestick chart
Hydra will be a family of protocols improving the Cardano blockchain – Photo: Shutterstock

Hydra, Cardano’s own Layer 2 solution, is making progress after the SundaeSwap decentralised exchange (DEX) successfully launched a demo on the network.

Charles Hoskinson, Cardano’s founder, bullishly tweeted: “Hail Hydra! So glad to see this demo. Hydra is coming to cardano one [decenrtalised application] DApp at a time.”

Yet, Cardano’s community and developers could still be waiting up to a year before the Layer 2 solution launches.

Despite a slight rise, the price of cardano (ADA) has not seen much positive price action following the Hydra announcement.

ADA to USD

Hydra details

While Cardano is gearing up to launch Hydra, its purpose and methods are similar to Ethereum Layer 2 solutions, like Arbitrum or Optimism. Hydra’s goal is to bring faster transactions, higher throughputs and lower fees.

The Layer 2 network will be redirecting blockchain traffic to achieve this. An official blog post explained:

“By providing more efficient means of processing transactions off-chain for a set of users, while using the main-chain ledger as the secure settlement layer, Hydra keeps security guarantees while remaining loosely coupled to the main chain.”

Hydra is set to become a “family of protocols”. The first protocol goes under the title Hydra Head and are off-chain mini ledgers that are shared by a small community of developers. Users can then build specialised and complex protocols on top of them.

Hydra’s roadmap

The blog post and development documentation make it clear that Hydra is a long-term project, which Cardano developers are hoping will drive growth.

XRP/USD

0.50 Price
+0.970% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.15 Price
+1.300% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

62,789.70 Price
+2.890% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

BCH/USD

485.85 Price
+4.500% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

As outlined by software engineer Sebastian Nagel, the short-term goal is to continue developing the Hydra Head protocol. It is currently building “a solid and stable foundation for the community to build real-world applications”.

The blog post, which was published in September, said it would be six to 12 months before Hydra launched. But this depends on research, experimentation and community feedback.

ADA price movements

ADA saw a slight price rise after SundaeSwap announced it had launched a demo on Hydra. It closed 13 October at $0.377 and bounced to a high of $0.388 the following day. 

But the cardano cryptocurrency has continued into a bearish trend that it has faced since the crypto crash in May. Even its major Vasil upgrade in September struggled to lift ADA.

Some community members are hopeful and speculated that Hydra could drive “non-speculative demand for ADA”.

Nagel said: “We want this ecosystem to serve the needs of individual consumers, enterprises, professionals, and the growing list of DApps and their developers.”

But this demand for ADA has not been realised in the short-term. At the time of writing on 19 October, cardano had sunk to $0.35, down 17% in the past month.

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You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
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