Cardano’s Leios scaling protocol demonstrated a sixfold increase in transaction throughput during a 41-day testnet phase, reaching 26.8 transaction kilobytes per second compared to the existing Ouroboros Praos ceiling of 4.51 TxkB/s. The protocol, developed by Input Output, achieved 54 percent traffic share during stable final testnet days and produced 127,000 blocks across the test period.
Leios operates by adding parallel capacity through larger Endorser Blocks while the Praos chain continues operating. Committees validate Endorser Blocks before recording transactions. During testnet, 30,000 Endorser Blocks were announced and 63 stake pools registered to participate.
The throughput gains, however, mask a harder constraint: Cardano’s long-term staking economics depend on converting testnet capacity into paying user volume. Cardano currently generates 48 million ADA in monthly staking rewards, drawn from transaction fees and ADA reserve releases. Input Output models a 43 percent decline in these rewards by 2029, leaving 20.64 million ADA monthly. At an average transaction size of 1,500 bytes and modeled fee of 0.221 ADA per transaction, the network requires between 36 and 50 transactions per second to remain economically viable.
Current Cardano transaction volume stands at approximately 800,000 transactions per month. Input Output’s long-term adoption goal is 27 million transactions per month, a threshold that would generate sufficient fee revenue to replace reserve-funded rewards as they decline.
At 20 transactions per second, the network would generate 11.5 million ADA in gross monthly fees, leaving a 9.2 million ADA shortfall against the 20.64 million ADA remaining after 2029 reward decline. At 50 transactions per second, gross monthly fees would reach 28.7 million ADA, exceeding the viability floor. The Cardano treasury receives a 20 percent allocation from the reward pot, reducing available staking returns further.
Input Output reported no protocol flaws during the 41-day testnet, though implementation issues including memory leaks, chain forks, and crashes were identified and fixed. The test traffic was artificially generated to stress-test the system rather than produced by actual paying users.
Leios can operate with low traffic without activating additional Endorser Block work, limiting the cost of unused capacity. Input Output targets mainnet readiness by the end of 2026, acknowledging that timeline would be unusually fast for a consensus upgrade. A Water phase of public testnet is currently underway.
