Cardano launches Leios testnet as ADA drops, 16M ADA stolen

Input Output, the research and engineering company behind Cardano, launched the Musashi Dojo public testnet to evaluate Ouroboros Leios under realistic and adversarial conditions. Leios adds a second block type alongside the existing Praos block to increase transaction throughput at the consensus layer. Developers estimate the design could improve throughput by roughly five to 20 times. The public testnet uses no real ADA and will proceed through five phases named Earth, Water, Fire, Wind and Void, with repeated stress tests planned before any decision on mainnet deployment.

Cardano’s governance process advanced the Van Rossem intra-era hard fork, formally Protocol Version 11, with an initiation proposal submitted during Epoch 637 on June 16. Van Rossem is intended to introduce protocol features without immediately entering a new development era and to prepare the network for future changes, including potential Leios integration. Near the end of Epoch 638, node telemetry showed about 86% of block production running node version 11, while exchange readiness measured by liquidity was roughly 50.24%. The hard fork must still clear governance procedures before activation on mainnet.

ADA traded near $0.14, its lowest level since 2020, down more than 55% year-to-date. The token faces the possibility of falling out of the top 20 crypto assets by market capitalization if losses continue. Exchange account ratios in recent trading data showed more long accounts than short on some platforms, while the position sizes of top traders were almost even and marginally net short. Those figures reflect a mix of small long positions by many accounts and larger short positions held by fewer traders.

Activity in parts of Cardano’s application layer has contracted this year, with some projects scaling back or ceasing operations. The ecosystem impact deepened when SecondFi, the successor to the Yoroi wallet, disclosed a software failure in wallet generation that exposed private keys. The company reported attackers drained about 16 million ADA across 374 addresses, valued at roughly $2.4 million at recent prices. Engineers carried out emergency rescue measures and secured about 129 million ADA before further drains; the recovered assets are being transferred to an independent third-party custodian to hold for affected users.

SecondFi identified the vulnerability, patched accounts that had not been affected and warned users not to restore compromised recovery phrases in other wallets. The company engaged an external accounting firm to audit recovered funds and opened a claims process for affected customers.

Mitchell Amador, CEO and founder of blockchain security firm Immunefi, noted: “SecondFi’s wallet software exposed the private keys it generated. Key compromises inside DeFi protocols dropped to 8.1% of losses by 2025 because teams hardened their key management. Attackers moved to where keys are held in bulk: exchanges, custodians, and now wallet generation code itself.”

Developers and stake pool operators have been asked to stress the Musashi Dojo testnet to identify weaknesses and attempt to break the system under demanding conditions. Input Output said the testing will focus on parameterizing and validating Leios rather than producing headline throughput figures. No firm date has been set for mainnet deployment.

Cardano’s broader research roadmap includes projects named Peras, Chronos, Crypsinous and Minotaur, which aim to address finality, time synchronization, privacy and consensus diversity. Those projects remain at various stages and lack fixed deployment schedules.

Next steps for the network include completion of Musashi Dojo testing, the governance decision and infrastructure readiness for Van Rossem, the outcome of SecondFi’s audit and claims process, and whether Cardano applications can regain sustained user activity.