Cardano (ADA) seems to have come one step closer to solving the scalability problems of blockchain technology. With the launch of the ‘Ouroboros Hydra’ off-chain protocol, Cardano could potentially process more transactions than known payment processors such as Visa and MasterCard.

The new protocol is the result of a five-year study that was partially funded by the European Union. Users can connect to the protocol and thus generate 10 ‘heads’. In principle, these are channels through which transactions and data can be exchanged.

Simulations set up by the University of Edinburgh show that each Hydra head can process approximately 1,000 transactions per second. However, according to Input Output HK (IOHK), the company leading the development of Cardano, this can still be optimised.

Theoretically, this will mean that the protocol will no longer be a bottleneck. Since the interactions between users do not have to be constantly recorded on the main chain, the blockchain will be spared.