Cardano Levels Up: Unveils Next-Gen Layer-2 Blueprint Beyond Hydra

Cardano is kicking off an exciting new chapter with a multi-layered scaling strategy that focuses on performance, privacy, and interoperability. Rather than relying on a single Layer-2 (L2) solution, the ecosystem is cultivating a suite of complementary technologies designed to meet the diverse needs of decentralised applications, finance, and cross-chain communication.

Hydra, while still a key part of this strategy, will now be just one of many components within the broader approach. Its two configurations – Hydra Heads for fast off-chain transactions within small groups, and Hydra Tails for broader, higher-volume use cases – show how Cardano is tailoring solutions to different levels of activity. 

In a recent controlled test, Hydra achieved more than one million transactions per second, highlighting its potential for high-demand environments.

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A Closer Look at Cardano’s L2 Innovations

These developments were presented at the June 2025 Cardano R&D session, hosted by Input Output Research and the Intersect Research Working Group. Contributors from Anastasia Labs, zkFold SA, Eryx, and Sundae Labs showcased a range of L2 initiatives in progress.

Anastasia Labs introduced Midgard, an optimistic rollup that will bring scalability to Cardano’s extended UTXO while reducing reliance on centralised governance. A mainnet-ready version is expected by the end of the year.

zkFold SA outlined its zero-knowledge rollup, which condenses large volumes of transactions into single submissions to improve efficiency and privacy. Eryx presented its work on a cross-chain bridge that uses zero-knowledge cryptography to enable secure communication between Cardano-based networks. Sundae Labs revealed Gummiworm, a Hydra-inspired rollup designed for decentralised finance, which separates control of assets from transaction execution for greater flexibility.

Throughout the discussion, participants emphasised the importance of shared standards and seamless interoperability between protocols. Avoiding the fragmented approach seen in other ecosystems was a key theme, alongside the need to address challenges like liquidity fragmentation and user experience.

Together, these initiatives signal a shift in Cardano’s scaling roadmap – from relying on a single breakthrough to building a coordinated ecosystem of purpose-built solutions, each contributing to the network’s performance, security, and usability.

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