Cardano is developing its second-layer protocol dubbed Hydra that is meant to improve its scalability similarly like the Lightning Network is doing with Bitcoin. Recently, Hydra made some progress with a specific development that could boost Cardano and bring micropayments to the masses.

What is Hydra for payments and how it is going to improve Cardano?

Meet the Hydra family

Hydra Head is a protocol family that will introduce several tools for developers to build on top of Cardano. The basic idea behind Hydra is to take all the transactions off-chain without leaving its security. There are plenty of similar approaches already available on the market. Ethereum has Arbitrum and Optimism and Bitcoin has the Lightning Network.

Hydra for payments is based on Hydra Head and serves as a toolkit to build payment applications on that second layer. It basically simplifies the way how developers can leverage the Hydra Head protocol for payment use cases.

According to a blog post from IOG, Hydra Heads will see a few significant updates that won’t affect Hydra for payments in Q4. More features for Hydra for payments are supposed to be rolled out within the next year.

DeFi on Cardano is doing fine

Many critics repeatedly attacked Cardano for being a ghost chain and showing no significant growth. The truth is very different from that story. Only recently the Cardano NFT ecosystem picked up and several collections were rising multiples in price due to the demand.

NFTs are just one example of things that are moving currently in a positive direction despite a long and dark bear market. Cardano is late to the party with many other blockchains like Ethereum adopting certain technologies earlier and creating new markets during the 2021 bull market.

With the current developments around Hydra, Cardano shows that timing is not everything. It is estimated that Cardano could easily handle 1 million transactions per second with Hydra. That being said, once the technology is reaching a point where millions of people can participate in it, adoption will most likely follow. Of course, it remains to be seen how other blockchain projects will address their issue with scalability in the near future. Hydra is not the only effort to improve Cardano and its blockchain in the next year, and it will be exciting to watch how things will develop for Cardano and IOG.