In the fourth installment of the Cardano R&D Sessions – a monthly series exploring the forefront of blockchain research and development – Input | Output Research (IOR), in collaboration with the Intersect Research Working Group, hosted an in-depth discussion on the future of Cardano’s protocol.
Bringing together leading researchers and innovators from across the ecosystem, the September session examined both the long-term vision for Ouroboros Omega and the practical progress of Leios as the workstream transitions from its prototyping innovation phase to an engineering phase for full implementation on mainnet following Input Output’s evidence-based methodology. With a keynote from Input | Output chief scientist Aggelos Kiayias and detailed updates from William Wolf, Giorgos Panagiotakos, and Brian Bush from the Leios innovation team, the session highlighted how Cardano is advancing toward its ‘final form’ of consensus – one that combines robust security, adaptive performance, and long-term sustainability.
The evolution of Ouroboros
Chief scientist Aggelos Kiayias traced the origins of Ouroboros, explaining how it was designed to retain Bitcoin’s most important qualities—security and decentralization—while overcoming its reliance on an energy-intensive proof-of-work consensus protocol. By substituting proof of work with proof of stake, Ouroboros offered a more sustainable model while guaranteeing resilience against adversarial behavior.
Like Bitcoin, Ouroboros was built to operate under conditions of dynamic availability, meaning it could reach consensus even when nodes come and go or participation fluctuates. It also inherited Bitcoin’s ability to self-heal after major consistency violations—something classical consensus protocols were never designed to handle.
Beyond these inherent strengths, Ouroboros introduced innovations that further improved on Bitcoin’s model. The reward sharing scheme created stronger incentives for decentralization by discouraging concentration of resources, while the Ouroboros Chronos protocol demonstrated how the system itself could provide clock synchronization, reducing dependence on external time assumptions.
These milestones illustrate how Ouroboros has continually evolved to meet the demands of a growing, global network while retaining its first principles of security, decentralization, and sustainability.
Omega: guiding principles for the final form
Looking ahead, Aggelos Kiayias explained how Ouroboros Omega represents the protocol’s ‘final form,’ pushing Cardano beyond Bitcoin’s achievements, while remaining grounded in decentralization and security.
Two complementary principles guide Omega.The first is optimistic multi-path execution, a design that enables the protocol to exploit opportunities for high performance when environmental conditions are optimal, without sacrificing security when they are not. In practice, this means that if the network shows high uptime and reliable connectivity, the protocol can accelerate to near centralized-like performance. When conditions degrade—whether through node failures, latency, or network splits—the protocol automatically falls back to a safe, decentralized mode of operation. This dynamic behavior ensures Cardano can absorb as much throughput as the environment allows, while always maintaining robust security guarantees. Current projects such as Ouroboros Peras, which accelerates settlement under favorable conditions, and Ouroboros Leios, which increases throughput, already apply this principle in concrete ways.
The second guiding principle is multi-resource security, which extends Ouroboros beyond pure proof of stake by diversifying the resources securing the protocol, reducing vulnerabilities from overreliance on stake alone. By incorporating additional resources—such as useful computational work (for example, zero-knowledge proofs or computational challenges such as protein folding that are valuable in their own right) and reputation signals tied to digital identity —Cardano can strengthen its security, broaden participation, and ensure long-term sustainability. This multi-resource logic enhances inclusivity while reducing systemic risk, creating a more resilient protocol than one secured by stake alone.
As Kiayias emphasized, the goal is to design for robust optimism. Acceleration should be robust in the sense that the adversary should not be able to easily disrupt the protocol to leave the optimistic path. But clearly, the system must at all times preserve security as its foundation. Incentives must align so that rational participants are not only honest, but rationally honest —following the protocol because it makes sense to do so. Omega, in this sense, is both an evolution of Ouroboros’ scientific rigor and a vision for how consensus can adapt to the real-world complexities of distributed systems.
Lively Q&A
The Q&A with Aggelos explored several forward-looking challenges for Ouroboros, including the difficulty of adapting under uncertainty in decentralized systems. Research streams like Leios and Peras already demonstrate how throughput and settlement can adjust to network conditions, but Omega aims to fully explore this design space—seeking either practical solutions or rigorous proofs of what is and isn’t possible without sacrificing security. Questions also touched on throughput, with the vision being to approach centralized performance when conditions allow, while leveraging layer 2 solutions for internet-scale workloads.
Finally, concerns around resilience and incentives only highlight the need for robust optimism. Optimistic execution paths must not be fragile or easily disrupted, and the system must ensure that rational actors are rewarded for honest participation. The discussion also noted that Omega could support more information-rich transactions, limited primarily by bandwidth. Overall, the Q&A reinforced the importance of blending adaptability, resilience, and incentive alignment in the future evolution of consensus.
Why Leios matters
The second half of the session turned to Leios, a concrete innovation that has been handed over to engineering for real-world implementation. William Wolff introduced Leios by outlining the problems it aims to solve.
First is capacity. Cardano’s blocks have on occasion been more than 80–90 percent full, creating congestion and delays. Second is capability. Smart contracts increasingly push against protocol limits on memory and execution steps, confronting developers with greater complexity when building large smart contracts. Third is sustainability. Stake pool operator (SPO) rewards continue to rely heavily on reserves rather than transaction fees, raising questions about the network’s long-term economic model.
Simply increasing block size under Praos is not viable for scaling sustainably, and it would slow diffusion and weaken security. Leios instead introduces a fundamentally new architecture for scalability.
How Leios works
Giorgos Panagiotakos explained the design of Leios, which splits each block into two components. A ranking block anchors order in the chain, similar to today’s Praos blocks, while an endorsement block carries larger batches of transactions and is added optimistically under favorable network conditions.
If conditions deteriorate, the protocol automatically falls back to Praos-style blocks, ensuring safety is never compromised. Transactions can also be re-included by reference, reducing redundancy and improving efficiency. Leios retains the safety of Praos.
For end users, these changes are almost invisible. Wallets and most applications continue to function as they do today, with the difference being less congestion and support for more advanced DApps. Economically, higher throughput means greater transaction fee generation, helping SPOs transition to a sustainable rewards model as reserves gradually deplete.
Evidence and results
Brian Bush presented the extensive evidence supporting Leios. The team combined analytic models, DeltaQ-style network analysis, a Rust simulator, and a Haskell prototype, all tested with mainnet-like transaction patterns and large-scale network topologies.
Combining Leios with the extended unspent transaction output (EUTXO) model could support a throughput of up to one million transactions per second. EUTXO demonstrated this capability during the Hydra Doom Tournament finale in Las Vegas earlier this year, for example. Under normal conditions, most transactions are included in the ledger within about one minute. When the network is overloaded, congestion produces back-pressure—slower processing—rather than unsafe behavior. Approximately 95 percent of ledger storage is dedicated to user transactions, with only around five percent overhead.
Leios also enables Plutus execution limits to rise significantly—potentially more than a hundredfold—depending on community parameter decisions. Under stake-based adversarial conditions, malicious nodes can only degrade throughput in proportion to their stake, while safety remains unaffected. For SPOs, the operational profile remains similar to today, with the main difference being increased storage requirements as throughput grows.
From innovation to engineering
With research and prototyping complete, Leios has now been handed over to the engineering team with its development accelerated by a 'follow the sun' model, where global teams collaborate across time zones. A dedicated development dashboard, previewed recently, will enable the community to track its progress as engineering teams work on the protocol. Deployment will take place through a single hard fork, preceded by a dedicated Leios testnet where wallets, indexers, and SPOs can stress-test the protocol under high-load scenarios.
Parameters will initially be set conservatively, with throughput gradually increased as the ecosystem adapts. Coordination across node teams and third-party infrastructure providers is already underway to ensure readiness.
The handover marks a significant milestone for the innovation team and the start of a new phase. Specifications, simulation data, and community input will continue to guide implementation as engineering progresses. For further details, please read CIP-0164 and visit the Ouroboros Leios website.
Cardano R&D Sessions take place on the first Tuesday of each month and explore research-led thematic discussions with guest speakers from across the ecosystem.
