Sundae Labs Publishes Gummiworm Specification for Cardano

Sundae Labs has published the technical specification for Gummiworm, a Cardano Layer 2 protocol designed for applications that need to process transactions while keeping funds connected to the base chain.

The document details the protocol’s architecture and its approach to transaction confirmation, withdrawals and the return of funds if consensus stops. It also sets out a development roadmap for Sugar Rush, the first exchange built on Gummiworm.

How Gummiworm Separates Execution and Custody

Gummiworm divides responsibilities between two groups of participants. A small set of nodes called the head orders and executes application transactions, while a separate group called the coil verifies the resulting activity and participates in authorizing transfers on Cardano.

Users deposit funds through the Cardano base chain and can then transact within the Layer 2 environment. Withdrawals require signatures from the head and the required coil participants under the protocol’s rules.

The specification also describes a fallback process for returning funds if the system stops reaching consensus. In that case, the protocol moves to a rules-based mechanism that distributes funds according to the recorded state.

Gummiworm was developed alongside Hydrozoa, an independent project that explored a lighter approach to the problem addressed by Hydra. Sundae Labs notes that Gummiworm and Hydra address similar scaling needs but do not share the same code.

Sugar Rush Tests an Order Book on Gummiworm

Sugar Rush applies the protocol to an exchange built around a central limit order book. Users place buy and sell orders, which the exchange matches according to their specified terms.

During a public competition, participants deposited 10 ADA each on Cardano mainnet and traded fictional tokens over a two-week period. The head was finalized after the test, and participants’ deposits were returned.

Sundae Labs has also published results from earlier performance tests. In an informal single-node test of the Gummiworm head, the team measured approximately 3,400 transactions per second on average, with a peak of around 4,000. These measurements describe the earlier test setup rather than the full public competition.

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Sundae Outlines the Next Development Stages

The roadmap identifies coil consensus, Intel TDX privacy features, data persistence and crash recovery as planned additions to an initial production-oriented version of Gummiworm.

After further testing, Sundae Labs plans to launch Sugar Rush as a trading venue with a market-making partner and a selected group of coil participants. The team envisions operating that version for approximately six months to a year, allowing it to exercise the fund evacuation process before introducing further changes.

Later plans include an EVM-based Layer 2 ledger, Midnight as an alternative base chain and an open coil network. Sundae Labs presents the roadmap as its intended development direction and has not assigned dates to those stages.