The team recently announced the first iteration of Hydra is mainnet compatible, but its use cases are still limited.
So, right now they're exploring use cases so they can tailor their approach to fit those needs
&
working on communication security
EXCITING ITEMS ON THE ROADMAP
Here's what's in the pipeline for the next several months.
1) Enabling Users to Enter and Leave a Head Without Closing it for Everyone
This will be done through incremental commits and de-commits
Example: If you and your friends were trading in a hydra head, you would be able to withdraw or "de-commit" your funds
without forcing your pals to also withdraw theirs and then have to open another head so they can continue.
Similarly, new people could join without disruption
2) Increasing the Number of People/Assets Who Can Use a Single Head
Unlike Bitcoin's Lightning channels, which only connect two people, Hydra head can host large groups of people and essentially any native Cardano asset.
However, there are limitations, because the current
Hydra iteration requires all assets in the head to be redistributed to their owners in a single transaction,
and while a single Cardano transaction can do A LOT, it isn't unlimited.
This limits a Hydra head's user and asset capacity to about 20 users at a time.
To address this, the Hydra team plans on devising a secure way to close a Hydra head using multiple transactions
that way, the # of UTXOs and users in a Hydra head will be able to be much higher.
This should allow more than 20 users and far more assets to be in the head at once
3) Multiple Hydra Heads per Hydra Node
In the current iteration, each Hydra node (the hardware Hydra runs on) can only host one head
This creates hardware inefficiency that limits potential transaction throughput
So enabling multiple heads is another high short-term priority.
4) Resilience
As of right now, it's unclear how live Hydra heads would respond during protocol-wide changes like a Chain Upgrade Event or parameter changes
Appraising those situations and resolving hiccups is another really important step in the Hydra head development
BEYOND HYDRA HEADS
These are the upgrades on the GitHub roadmap I thought were most significant, but this roadmap isn't the end.
After finishing the Head Protocol, there are two other main protocols in the Hydra family the team will turn to.
1) The Tail Protocol
This software will make it easier for people to use Hydra on low-capacity devices, like a cell phone
&
make Hydra heads capable of hosting assets whose owners aren't always online during the life of the head
These will be great for accessibility
2) The Cross-Head and Tail Communication Protocol
This will allow hydra heads to communicate with each other and with hydra tails without going through Cardano's L1
After this protocol launches, users will be able to send assets through a network of Heads, like on Lightning.
That's it!
Big thanks to @ch1bo_ for keeping the GitHub organized enough for a non-programmer like me to understand it,
and to @_KtorZ_ for this thread about Hydra a couple years ago.
1) Tampering With Monetary Policy Sets a Dangerous Precedent
@cardanoan argued that if we introduce inflation to help incentivize staking, it would theoretically open the door to all the inflationary embezzlement we see and hate in TradFi. The supply cap needs to be untouchable
For example, if we allow inflation for staking incentives, what's to stop the government from issuing more ADA to fill the treasury?
We know all too well what happens when governments think they can print as much money as they want...
#Cardano has a lot of advantages as it moves into the next bull cycle
but it also has some serious short and long term issues that we need to understand and resolve
So, what are some of Cardano's competitive vulnerabilities?
Here are 8 🧵👇
Vulnerability 1: Relatively high transaction fees
While Cardano's fees are a lot lower than #Ethereum and #Bitcoin, they are still significantly higher than other 3rd gen blockchain's like Solana, Algorand, Tezos etc...
Few industries are more competitive than the L1 Smart Contract Space.
Does Cardano have a moat?
Here's my analysis of CARDANO'S SUSTAINABLE COMPETITIVE ADVANTAGES:
I see 6 🧵👇🏼
MOAT 1: Features of EUTXO (Hard, but not impossible to replicate)
With the exception of Ergo, all other SC chains use the account model, so effectively speaking the following advantages of EUTXO are unique to Cardano.
1) Knowing exactly what a transaction fee will be
2) Very low chance of transactions failing 3) No fee if a transaction fails 4) Easier parallel computation (scalability feature) 5) Possibility of REVOLUTIONARY defi innovations like Distributed Dapps (AXO, Genious Yield) which would be impossible on account-based chains.