Does Cardano's Hydra protocol want to eliminate financial intermediaries? Is real-time settlement reliable?

Question

In the Cardano ecosystem, there is a protocol called Hydra, which has recently attracted considerable attention in the TradFi circle. What does it aim to do? Directly replace those financial intermediaries and become a settlement layer in real-time.

In simple terms, it means that in the “center” of Hydra, both parties in a transaction can complete the final settlement in seconds—without waiting or worrying about overnight risks. Behind this is the Cardano main chain, which has been running stably for eight years, providing a safety net and ensuring that the settlement is rock solid. Even more impressive is that the rules are programmable, fully transparent, and compliance checks can be handled automatically.

Some analysts believe that this approach can save institutions a lot of processes and reduce costs. If it can really be implemented, it would be a significant transformation for financial infrastructure. Do you think traditional financial institutions will buy into it?

ForkItAll · Accepted Answer

A second-level settlement sounds great, but will those people in TradFi really give up the middleman&#39;s cut? I think it&#39;s unlikely.

FomoAnxiety · Answer

Sounds good, but what about those guys in TradFi? Hehe, will they really use it?

No matter how nicely it&#39;s put, it still has to pass the compliance check, right? Compliance automation sounds outrageous.

It&#39;s a fact that Cardano has been stable for eight years, but can this be so simple when it comes to financial settlement?

Institutions have long been accustomed to being played people for suckers by intermediaries. Asking them to change their processes? Dream on.

Settlement in seconds is indeed attractive, but I wonder if it will actually work in practice.

As for transparency in rules, I bet the folks in TradFi see that as a threat, haha.

Stability is undisputed, but would they really dare to replace the current settlement system with this? Would the authorities loosen their grip?

MetaverseLandlord · Answer

Settlement in seconds sounds great, but will those people in TradFi really believe it? They would rather pay more for that sense of "security."

SchroedingerAirdrop · Answer

Settlement on a second level sounds great, but can the Compliance checks of TradFi be automated? I have my doubts.

NftRegretMachine · Answer

Settlement in seconds sounds great, but can those folks in TradFi really use it? I have my doubts.