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Cardano Reaches New Scaling Milestone, ADA Price Yet Unmoved: Details

Wed, 03/16/2022 - 10:17
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Tomiwabold Olajide
Charles Hoskinson has shared the good news of first Hydra Heads launching on public Cardano testnet
Cardano Reaches New Scaling Milestone, ADA Price Yet Unmoved: Details
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Cardano founder Charles Hoskinson has shared the good news of the first Hydra Heads launching on the public Cardano testnet, almost a year after the original paper's publication.

Hydra Heads, the first in a suite of protocols, is a critical element in Cardano's scaling journey. Hydra refers to a collection of Layer 2 solutions aimed at improving network security and scalability. Although it was conceived as part of the Ouroboros research team's work, it has forged an independent path since the original paper's publication.

Hydra aims to boost throughput, reduce latency and provide cost-effective solutions without requiring a lot of storage. According to a recent blog post by IOHK, Hydra Heads is a crucial building block that exploits the capabilities of the Extended Unspent Transaction Output (EUTXO) model to enable more complicated solutions on top.

Therefore, they make for a strong foundation on which to build Cardano's scaling layer. Although they are an important part of the scaling journey, they are not the final destination. Hydra Heads shine when a small group of participants needs to process many quick interactions.

As U.Today previously reported, the Cardano founder reiterated that a large wave of projects is incoming after June, when the Vasil hard fork happens. With more than 500 projects currently building on Cardano, IOHK says it plans to roll out a slew of scaling improvements in 2022, with an emphasis on hard fork combinator (HFC) events in June and October.

ADA price unmoved

ADA/USD Daily Chart, Image Credit: TradingView

Although the groundwork for future improvements in the Cardano ecosystem has been built, the ADA price has failed to catch up. Shortly after hitting its ATH, Cardano (ADA) has dwindled to trade below the daily MA 50. ADA is currently consolidating at $0.81, down nearly 75% from its all-time high of $3.10. ADA might strive for a near-term resurgence if the bulls are ready to preserve a foothold at the support near the $0.74-$0.81 area.

A close above the daily MA 50 at $0.96 might be necessary to boost further recovery and squash short-term price declines. If the bulls lose steam, a close below $0.74 could risk further declines.

Furthermore, according to IntoTheBlock data, ADA has a 68% 30-day correlation with BTC, therefore traders and investors should keep a close eye on Bitcoin.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.