IO: Consensus Initiative

Proposal as pdf: https://ipnso-com.ipns.dweb.link/?cid=QmPdBp8QjKaPdYdvwLxzDiCxX85hGx8H6rxbSvTTuLkcx2

Cardano needs a step change in throughput to meet its 2030 ambitions, and Leios is how it gets there. This proposal funds the path from public testnet to a mainnet-ready release candidate — delivering a 10–65x increase in transaction capacity.

Why this scale matters: Cardano's 2030 strategy targets growth from roughly 800,000 monthly transactions to over 27 million. At sustainable utilization levels, that requires at least 6x current capacity. Leios delivers 10x or more — giving significant room to grow. It works by enhancing Cardano's existing Ouroboros Praos consensus with Endorser Blocks and committee-based validation, increasing throughput without compromising decentralization or making stake pool operations unviable.

The current budget cycle (ending June 2026) delivers an early public testnet. This proposal picks up from there and focuses on three objectives. First, a release candidate: maturing the implementation through substantial engineering, conformance testing against formal specifications, and integration into the primary node. Second, high confidence: systematic validation through parameter exploration, load testing, and adversarial red-teaming on the public testnet. Third, hard-fork enabling: everything within IO's control to make the Leios hard fork possible, including stable interfaces for ecosystem tools (DB-Sync, Mithril, Blockfrost), SPO and developer workshops, governance artifact preparation, and contingency procedures. The proposal explicitly excludes external dependencies like the community hard-fork vote from its acceptance criteria — those are captured as risks, not promises. Intersect administers all funds through milestone-based smart contracts with independent oversight. Unspent funds return to the Treasury.

Treasury Ask: ₳27,714,342

As a DeFi user or DApp developer on Cardano, I want the consensus layer to deliver 30x+ throughput capacity and faster settlement, so that Cardano can meet its 2030 transaction targets and I can build applications that require high throughput and rapid finality without congestion.

This proposal focuses on Leios, which delivers the throughput capacity Cardano needs to meet its 2030 ambitions. Leios enhances Ouroboros Praos rather than replacing it, preserving Cardano’s security guarantees while dramatically improving performance.

Leios: From Testnet to Mainnet-Ready

Opportunity: Cardano’s 2030 product strategy targets scaling from ~800,000 transactions per month to over 27 million (a 30x increase) while remaining economically self-sufficient as the Reserve diminishes. Ouroboros Praos provides a proven-secure foundation — and Cardano is now ready to build on that foundation with a step change in throughput. Meeting the 2030 target of 27M monthly transactions at sustainable utilization levels (50–70% headroom) calls for at least 6x current capacity. Leios delivers 10x+, giving Cardano significant room to grow.

Solution: Leios is the consensus upgrade that delivers this step change. Designed as an overlay protocol that enhances Praos, Leios introduces Endorser Blocks and committee-based validation to dramatically increase transaction capacity while preserving Cardano’s security guarantees and predictable finality. The result is a 10–65x throughput increase, directly aligned with the 2030 adoption targets, achieved without compromising decentralization or making stake pool operations economically unviable.

This proposal continues Leios development from the current (2025/26) budget cycle, which concludes in June 2026 with an “Early Public Testnet” milestone. During this cycle, the CIP-164 proposed was merged, initial throughput demonstration and an alpha feature-complete implementation were completed, and Leios was deployed on a public testnet (dedicated; not hard-forkable).

The 26/27 cycle focuses on maturing from prototype to mainnet-ready, progressing through Software Readiness Levels 5–8. Three objectives structure the work:

1. Release Candidate:

The critical path: maturing the implementation to a mainnet-ready release candidate through substantial engineering effort, conformance testing against formal specifications, and progression through SRL 5–8. This includes a substantial rewrite of consensus components, implementing Leios block structure for Dijkstra ledger era, completing the conformance test suite against Agda formal specification, and integration into the primary node implementation.

2. High Confidence:

Systematic validation of the protocol through parameter exploration, continuous load testing, and adversarial testing on the public testnet. This includes studying timing parameters and size limits, developing a parameter graduation plan, stake-based and network-based attack testing, red-teaming exercises, and culminating in an updated threat model with validated mitigations.

3. Hard-fork Enabling Leios:

Everything within our control to make the hard fork possible: stable client interfaces (N2C mini-protocols, utxo-rpc API), implementation-independent technical documentation, SPO and developer workshops, tactical support for close-by projects (DB-Sync, Mithril, Blockfrost), testnet hard-forks, mainnet parameter graduation plan, contingency procedures, and preparation of updated guardrails script and rationale documents for governance. Success is defined by completing these activities, not by the mainnet hard fork occurring.

Treasury Ask: Input Output’s Cardano Business Unit (CBU) – the product- and market-focused unit dedicated to building, delivering, and supporting initiatives that strengthen the Cardano ecosystem – is requesting ₳27,714,342.

Proposed Value Delivered (Why)

Leios is how Cardano scales to meet its 2030 ambitions.

Cardano’s 2030 product strategy sets an ambitious target: scaling from today’s ~800,000 transactions per month to over 27 million (a 30x increase) while remaining economically self-sufficient as the Reserve diminishes. Building on Praos's proven security, Leios introduces Endorser Blocks and committee-based validation to deliver a 30–65x throughput increase. Leios introduces Endorser Blocks and committee-based validation to deliver a 30–65x throughput increase, directly aligned with the 2030 adoption targets, without compromising decentralization or SPO economic viability. This isn’t about chasing theoretical maximums; it’s about building the capacity Cardano needs to become the trusted foundation for DeFi, real-world assets, and enterprise adoption, ensuring the network can generate sufficient fee revenue to thrive independently.

KPIs

Additional KPIs

Pillars

Deliverables & Roadmap

Leios Strategy: https://leios.cardano-scaling.org/docs/strategy
Leios Roadmap: https://leios.cardano-scaling.org/docs/roadmap/

**Hard-fork enabling Leios has significant external dependencies (third-party infrastructure readiness, governance action submission, community hard-fork vote) not within IO’s control. A broader sequence window has been communicated to reflect this.

Notes on milestones:

• Parameterization flexibility: CIP-164 target parameters are treated as an ideal goal. Technical feasibility may be confirmed at a lower parameter set, with higher targets addressed through the gradual deployment plan.
  
• Dijkstra era hedging: Including Leios in the Dijkstra era means the inter-era hard-fork carries Leios support even if activation follows later via intra-era fork.
  
• Preview as deployment pipeline entry: Hard-fork enabling targets preview testnet activation. Preview is the entry point to the Cardano deployment pipeline. Preprod and mainnet depend on ecosystem readiness and governance timing.

Resources

To execute on all three objectives, the initiative will be delivered by IO engineering teams spanning the following disciplines:

• Release Candidate Readiness: A cross-functional team spanning consensus engineering, ledger, networking, cryptography, and node/API development
  
• High Confidence Validation: Consensus, Performance & Tracing, Testing, Network, Research & Innovation consultations and Formal Methods
  
• Hard-fork Enabling: will demand resources from Consensus, Network, Ledger, Node/API, Comms & Ecosystem, Product and Architect

Budget

Total Treasury Ask: ₳27,714,342

Pricing Principles: IO is requesting funding in ADA and has provided USD figures as a reference. A portion of the funding shall be specifically tied to demonstrating measurable impact on Cardano's KPIs and pillars

• Personnel & Delivery: Majority of costs needed to fund the delivery resources
  
• Ecosystem support, Audit, Assurance & Contingency: Leadership, ecosystem, and delivery to support execution and wider alignment. Independent work assurance and audits, plus contingency to account for complexities during execution

Risks

Additional Information

Known Limitations: Potential non-portability of required network traffic prioritization features. Higher operational cost for SPOs. Allows for much greater chain growth. High throughput only up to 25% adversarial stake assumption.

Release / Solution Readiness: Leios testnet by mid 2026 (at start of this proposal). Leios targets the Dijkstra era. Leios-enabled release candidate in 2026.

Demos & Assets: Monthly review meetings with demos (https://leios.cardano-scaling.org/docs/development/monthly-reviews). Leios website (https://leios.cardano-scaling.org/) with showcases and explainers. Leios dev tracker (https://engineering.iog.io/leios).

CIP-164: Ouroboros Leios (https://cips.cardano.org/cip/CIP-0164)

CPS-18: Greater Transaction Throughput (https://cips.cardano.org/cps/CPS-0018)

Technical design and implementation plan: https://github.com/input-output-hk/ouroboros-leios/blob/main/docs/leios-design/README.md

Impact Analysis: https://github.com/input-output-hk/ouroboros-leios/blob/main/docs/ImpactAnalysis.md

Treasury Governance & Compliance

Contract Management

A written off-chain Legal Contract will be created between Input Output and the Cardano Development Holdings (CDH), as mandated by the Constitution, and will be administered by Intersect. This will include details of the project delivery schedule and dispute resolution.

Project Delivery

All milestones, acceptance criteria, payment amounts and expected delivery dates will be agreed between the Input Output and Intersect, acting on behalf of the CDH. Input Output will deliver according to the agreed-upon project schedule within the Legal Contract, of which the necessary information will be made public via the budget management platform via transaction metadata.

Defined by the milestones within a Legal Contract, Input Output will submit and attest milestone acceptance to the community, Intersect or 3rd Party Assurer.

Project progress will be monitored via Intersect's delivery assurance function which will be communicated to the community.

Acceptance of the work will be supported by a 3rd Party Assurer, who will be responsible for reviewing and signing off the work completed at each project milestone against the corresponding milestone deliverables detailed within the Legal Contract. This work is funded from a portion of this treasury withdrawal.

Auditable Accounts & Fund Delegation

Budget Management Tooling

To administrate treasury funds on-chain, Intersect will utilize the treasury management smart contract framework developed by Sundae Labs. The smart contracts have been extensively tested including audits from TxPipe and MLabs.

Final mainnet validation test can be seen via the Disburse action within transaction: 0f591dc544ae14102dbb4a74d5311a6acffc1772b163d8b7a9656b9525950b17

This withdrawal will utilise Intersect’s 2025 treasury reserve contract with address being: stake17xzc8pt7fgf0lc0x7eq6z7z6puhsxmzktna7dluahrj6g6ghh5qjr
Funds will later be migrated to a 2026 treasury reserve contract once established.

Budget Management Specifics

Intersect will utilize a single Treasury Reserve Smart Contract (TRSC), with many Project-Specific Smart Contracts (PSSC), managed by Intersect. Intersect's management consists of three 'admin' and two Intersect 'leadership' roles. An Oversight Committee consisting of five external, independent third-party entities will provide checks and balances on Intersect, and safeguard against errors and unilateral control. The administration of both TRSC and PSSCs will be managed by Intersect, with external oversight on certain actions from the Oversight Committee.

The 2025 TRSC Oversight Committee consists of Sundae Labs, Cardano Foundation, Dquadrant, Xerberus and NMKR. Their role is to independently verify key administrative actions using on-chain logic, ensuring accuracy and consistency without exercising discretion over governance decisions.

For all details on Intersect's configuration please see the Smart Contract Guide on the knowledgebase.

The high level permissions are as follows:

• TRSC Fund and PSSC Modify
  
  • Two of the three Intersect admins, two of the five trusted entities and one of the two Intersect leadership sign-off must authorize
    
• TRSC Disperse
  
  • Two of three Intersect admins, three of five trusted entities and two of two Intersect leadership sign-off must authorize
    
• TRSC Pause and Resume
  
  • Two of three Intersect admins, and one of two Intersect leadership sign-off must authorize
    
• TRSC Sweep
  
  • One of three Intersect admins, and one of two Intersect leadership sign-off must authorize
    
• TRSC Reorganize
  
  • Two of three Intersect admins and three of five trusted entities must authorize

Processes

Upon enactment of this governance action, funding for this project will be directed into the TRSC's stake account. All instances of TRSC and PSSC can not be staked with a SPO and will be delegated to the auto-abstain predefined DRep. From here funds will be withdrawn into a UTxO remaining at the TRSC.

When a 2026 TRSC is established, the funding for this project will be migrated via the ‘disburse’ action.

When the Legal contract is prepared and Input Output is ready, funding for this project will be transferred using the Fund action to a PSSC. All milestones will be outlined within the metadata.

A dashboard will be available for the community to audit the TRSC or PSSC and track metrics related to this withdrawn ada as well as being immutably verifiable on chain.

Funding Denomination

All amounts in this proposal are denominated in ada (₳). The total Treasury ask is ₳27,714,342 USD figures ($6,651,442) are provided for reference only, based on an ADA/USD rate of 0.24.

Refund Conditions

All funds not disbursed by the end of the delivery period will be returned to the Cardano Treasury. A final reconciliation will be published as part of the oversight reporting cycle. In the event of partial delivery or scope reduction, unspent funds associated with cancelled or reduced deliverables will be returned proportionally.

Prior Treasury Receipts

IO and its affiliated entities has been accountable for delivery of work funded by the Cardano Treasury. The total funds allocated has been ₳130,708,860 across a number of projects within Treasury Smart Contract, to date IOG has withdrawn ₳78,459,777.

**Note: for Catalyst this only reflects the workstream that focuses on the Hermes Infrastructure and UX/UI improvements, not the execution and operation of Funds 14-16. Per Info Action this is in the process of transitioning to Cardano Foundation.

Net Change Limit Compliance

The requested amount does not at time of submission, on its own or in aggregate, breach the applicable 350M Net Change Limit covering Epoch 613 to Epoch 713.

In accordance with the guardrail TREASURY-02a, this withdrawal does not exceed the NCL at the moment of submission.

Audit & Oversight

Audit and oversight costs are included within the overhead applied to this proposal. The Intersect administration fee covers administrative oversight and is reflected within the cost of this proposal. Independent oversight will be provided through Intersect and technically capable third-party, including reporting obligations and milestone-based disbursement controls.

Standardized Format & Immutable Hosting

Upon finalization, this proposal will be hosted on IPFS in an immutable format. The blake2b-256 hash of the document will be provided for on-chain reference and verification.