Cryptocurrencies were invented to replace the traditional financial system.
However, the slow transaction rates of Bitcoin, and the high gas fees of Ethereum, have severely hindered adoption. Visa processes approximately 1700 transactions per second (TPS), however most early blockchains can only process at 1% of that speed. The Cardano Foundation has spent 5 years in search of a scaling solution to solve these issues and has developed the Hydra protocol.
Hydra is Cardano’s “second layer solution” working in conjunction with its native blockchain. Each hydra head is an identical node that is capable of processing off-chain transactions. This relieves the burden on the native blockchain and allows for faster processing of transactions. Hydra was designed to complement the model of the staking pool. Each pool can create a new hydra head. When adding more pools, the number of heads increases linearly. Benchmark testing has shown that each Hydra head can process at least 1000 TPS. For example, with 1000 pools Cardano may theoretically be able to scale up to 1 million TPS. This would allow transactions to be processed very quickly.
By building on the Cardano ecosystem, GeroWallet will be able to leverage the scalability of the Hydra Protocol. The numerous DeFi functions in the wallet will require high throughput transactions that only Cardano’s Hydra protocol can accommodate. As an all-in-one DeFi solution for the Cardano network, applications on GeroWallet include:
- Storing, sending and receiving any cryptocurrency
- Directly buying or selling of any cryptocurrency using fiat on/off ramps
- Token staking, yield farming, and digital asset lending
The scalability afforded by the Hydra protocol will enable the GeroWallet team to fulfill their vision of bringing DeFi to the masses and revolutionizing the blockchain wallet ecosystem.