Cardano is heading towards a new scalability era with layer-2 technology.

Cardano (ADA) is driving a long term scalability strategy with a new layer-2 (L2) wave of innovation, going beyond the framework of Hydra.

This next phase was presented in a high-level research discussion in June 2025, organized by Input Output Global (IOG) — the main development team behind Cardano.

The event brings together technical leaders from the Intersect Working Group, developers from prominent projects within the Cardano ecosystem, along with many academic partners.

Here, they have built a roadmap in which Hydra is just a part of a larger L2 portfolio, aimed at improving speed, privacy, and interoperability across the entire ecosystem.

L****2 Solutions

At the event, many L2 solutions such as Midgard, Hydra, and other projects were introduced.

Hydra — initially designed for high-speed off-chain transactions — now has two main configurations. The Hydra Head version focuses on small fixed participant groups, utilizing a state channel model. Meanwhile, Hydra Tail adopts a rollup model, aimed at handling larger transaction volumes.

Midgard developed by Anastasia Labs is introduced as a native optimistic rollup solution of Cardano. The project utilizes deterministic fraud proofs and minimizes reliance on centralized governance. Midgard is inspired by the design of L2 solutions on Ethereum such as Optimism and Fuel. The mainnet is expected to launch by the end of this year.

Meanwhile, two projects using ZK* technology, zkFold and Eryx, also attracted attention at the Cardano event.

zkFold helps compress hundreds of transactions into a single submission to enhance processing efficiency. Meanwhile, Eryx aims to deploy a ZK bridge that allows secure communication between chains within the Cardano ecosystem.

Another presentation comes from Sundae Labs, the unit that is developing Gummiworm – a rollup inspired by Hydra, separating the transaction execution process from asset custody (. This change promises to support more flexible DeFi activities on the Cardano platform.

The goals of L2 on Cardano

The speakers at the seminar emphasized that the future of Cardano will not rely on a single L2 solution, but rather on a portfolio of L2 solutions that are capable of interoperation.

They stated that each L2 will serve a distinct purpose, but will still ensure compatibility through common standards and shared infrastructure.

"The goal is to provide a portfolio of solutions optimized for various use cases — from DeFi, privacy security to high-throughput applications — all built on common standards to ensure seamless interaction between protocols."

Meanwhile, experts also emphasize the necessity of building a unified interface layer to ensure smooth interoperability between L2 solutions. Attendees stated that this approach aims to avoid the fragmentation that has occurred in Ethereum's scaling ecosystem.

However, they also acknowledge that there are still many challenges such as fragmented liquidity and a suboptimal user experience that are barriers to the adoption of L2 solutions.

To address these issues, they have proposed several solutions, including liquidity linking, enhancing integration between protocols, and establishing reasonable incentive mechanisms for both users and developers.

*Zero-knowledge )ZK( refers to a type of protocol in which one party can prove to the other that a statement is true without revealing any information other than the validity of that statement.

Dinh Dinh