user935: As I understand Hydra protocol has two main components:

Hydra Head protocol
Hydra Interhead protocol

Does any of these components require changes to current consensus protocol? If not, how will it be implemented? My guess is as a smart contract + some network communication protocol (possibly p2p).

user387: No.
Hydra is a layer-two solution which works "on top of" Cardano. A hydra-node which implements the Hydra Head protocol will run alongside the cardano-node and provide an isomorphic state channel which has the same transaction format and ledger rules as Cardano, but with a much simpler consensus. The fact that not the whole network needs to agree to reach consensus in a single Hydra Head, but only the participants of a particular Head, makes this faster & cheaper than to process transactions on the mainchain.

935: <p>As I understand Hydra protocol has two main components:</p>
<ol>
<li><a href="https://eprint.iacr.org/2020/299.pdf" rel="nofollow noreferrer">Hydra Head protocol</a></li>
<li><a href="https://eprint.iacr.org/2021/1188.pdf" rel="nofollow noreferrer">Hydra Interhead protocol</a></li>
</ol>
<p>Does any of these components require changes to current consensus protocol? If not, how will it be implemented? My guess is as a smart contract + some network communication protocol (possibly p2p).</p>
 387: <p>No.</p>
<p>Hydra is a layer-two solution which works &quot;on top of&quot; Cardano. A hydra-node which implements the Hydra Head protocol will run alongside the cardano-node and provide an isomorphic state channel which has the same transaction format and ledger rules as Cardano, but with a much simpler consensus. The fact that not the whole network needs to agree to reach consensus in a single Hydra Head, but only the participants of a particular Head, makes this faster &amp; cheaper than to process transactions on the mainchain.</p>
