Hydra is the Layer 2 protocol of Cardano, developed by Input Output. A small group of participants locks funds on mainnet and opens a Hydra Head, an off-chain ledger that uses the same EUTXO rules and the same smart contracts as the main chain. Inside the Head, transactions confirm in well under a second and cost next to nothing. When the group is done, the Head closes and only the final state is written back to mainnet, so the chain records the opening and the settlement rather than every individual transaction.
Hydra reached version 1.0 in October 2025, the point at which the team committed to supporting the implementation in production, and has continued with 2.x releases since. It suits use cases with a known set of participants and many small transactions, such as payments, gaming and auctions. Hydra scales applications sideways, while Leios raises the throughput of the main chain itself.
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- Layer 2Protocols built on top of a Layer 1 blockchain to improve scalability or add functionality.View term
- Hydra HeadAn off-chain micro-ledger between a small group of participants in the Hydra Layer 2 protocol.View term
- MithrilA stake-based threshold multi-signature protocol that lets Cardano nodes trust a blockchain snapshot without re-validating the whole chain.View term
- eUTXOCardano's extension of the UTXO accounting model; each output can carry datum and script logic, so smart contracts express rules without the shared mutable state used by account-based chains.View term
- LeiosAn Ouroboros extension that raises Cardano throughput by letting block producers publish larger endorser blocks next to regular Praos blocks. Linear Leios is the variant headed for mainnet with the Dijkstra hard fork.View term