If scalability isn’t about a ‘million TPS’ for Cardano, here’s what it is aiming for

Shortly after announcing performance enhancements within its roadmap for 2022, Cardano is currently in the Basho phase. A phase where it refuses to define scalability in terms of ‘a million TPS.’ It stated in a recent blog post,

“Amongst all those available, TPS is probably the least meaningful metric to consider as a means of comparison.”

It further added that transactions come in different shapes and sizes, especially while comparing different platforms. Hence,

“Using TPS as a metric within the same context (for example, to compare two versions of the Cardano node) is meaningful. Using it as a means of comparison between blockchains isn’t.”

Therefore in this regard, IOHK, the company backing Cardano, stressed looking at throughput, finality, and concurrency as crucial metrics. While throughput is the volume of data processed within a specified period, finality is the time taken by the system to finalize a transaction. Additionally, IOHK defined concurrency as the amount of work that can be done by different actors without blocking each other.

Scaling, Hydra & Performance

With that being said, Basho is the scaling phase and network optimization phase for Cardano. Within which, Hydra is a crucial protocol for scaling. We know Hydra kick-started after Alonzo and since then, it has attracted attention as an ensemble of layer 2 solutions. As per IOHK chief Charles Hoskinson,

“It’ll be able to offload a large amount of the transaction traffic that’s going to come from all of the apps that are coming (soon). As PAB comes online, Cardano is going to get hammered by an enormous amount of traffic. Hydra is a necessity for that…”

And, Hydra Head, which is akin to an off-chain mini-ledger between participants, form part of this Cardano’s scalability journey. Having said that, IOHK mentioned,

“Hydra Heads excel in achieving near-instant finality within a Head.”

As of this week, the Hydra team announced completing work on the first version of on-chain validators along with publishing the engineering roadmap for Hydra Head.

Meanwhile, as Cardano scales to avoid any future congestion issues on its dApps, ADA wallets are also on the way up. Recently, the community crossed a three million milestone in terms of active wallets. A major increase from close to 200,000 at the start of 2021.

Meanwhile, Kraken’s recent report also noted a surge in network activity on the back of recent upgrades.

Following a series of major upgrades and hard forks, transactions on Cardano underwent exponential growth over the past 18 months.

Learn more about these upgrades and why Cardano is seeing this growth in activity: https://t.co/QZcJS5wL8G pic.twitter.com/8JAUEi9WzH

— Kraken Exchange (@krakenfx) February 3, 2022

When it comes to the native token, ADA, the coin has managed to rise by 10% in the past week. At the time of writing, it is hovering close to $1.16, up around 8.7% in the last day. However, it is still down over 60% from its all-time-high seen back in September 2021. But, the platform rose to enclose an overall TVL of $84 million so far on DeFillama.