Cardano Leios Testnet Prepares for Water Phase as SPO Rewards Await Approval

Input Output has outlined the next stage of Ouroboros Leios testing on the Musashi Dojo public testnet. The July Leios Monthly Review covered preparations for the Water phase, BLS key registration, Endorser Block announcements and a proposed reward program for participating stake pool operators.

The Water phase will test protocol configurations and node behavior under different network conditions. The results are intended to help determine the initial Leios parameters for a future Cardano mainnet deployment.

Musashi Dojo Moves Toward the Leios Water Phase

Musashi Dojo is a public Cardano testnet operated by Input Output. Independent stake pool operators run Leios-enabled block producers and participate in consensus, while developers can test DApps, wallets, indexers and other infrastructure before the protocol reaches mainnet.

Leios extends Ouroboros Praos by pairing Cardano’s regular Ranking Blocks with larger Endorser Blocks that reference additional transactions. A stake-based committee validates each Endorser Block, and the resulting certificate can later be included in the Praos chain.

The initial Earth phase focused on establishing the testnet, synchronizing nodes, registering pools and bringing multiple node implementations into the testing environment.

Water will shift the program toward systematic testing of timing parameters, Endorser Block sizes, mempool behavior, transaction submission and sustained network load. Different configurations will be compared to identify settings that can operate reliably across distributed infrastructure.

The Musashi Dojo program targets an initial throughput capacity increase of between five and twenty times. That range remains a program objective to be evaluated through implementation work, parameter selection and testnet measurements.

Leios has not reached release candidate status, and no mainnet hard fork date has been confirmed.

BLS Registration Connects SPOs to Leios Voting

The Cardano ledger and CLI now support the registration process for the BLS keys required by Leios voting.

Stake pool operators can generate BLS signing and verification keys, then include the public key and proof of possession in a pool registration certificate. The development team is also preparing a process that would allow existing pools to add a BLS key without completing an entirely new registration.

Under the CIP-164 specification, Leios uses a committee derived from Cardano’s active stake distribution. Committee members vote on Endorser Blocks, and their BLS signatures are aggregated into a compact certificate for inclusion in a later Ranking Block.

Registered BLS keys can already be stored in the ledger state, but Musashi Dojo is not yet using them for active committee participation. A subsequent node release is intended to connect the registered keys with committee membership and live voting.

The prototype has also added Endorser Block announcements. These messages connect an eligible block-production opportunity with a specific Endorser Block and distribute that information across the network before voting begins.

The current implementation can create and propagate the announcements. Additional rules governing when nodes retrieve and vote on an Endorser Block will follow further measurements of announcement diffusion.

SPO Incentive Plan Awaits Final Approval

Input Output is preparing an incentive program for stake pool operators running infrastructure on Musashi Dojo. The plan had received preliminary approval at the time of the July review but was still awaiting a final internal decision.

The proposed registration process would use a verification code published through testnet pool metadata to confirm that an operator controls the registered pool.

Participation could require operators to produce blocks, vote on Endorser Blocks and share operational data with the development team. Operators may also be asked to run supplied diagnostic scripts so the team can compare node behavior across different hardware, network conditions and software environments.

The proposed program includes identity verification and regulatory eligibility requirements. Rewards would be distributed monthly or every two months in mainnet ADA, although payment amounts and final participation rules have not been published.

Final approval would add a structured mechanism for retaining operators and collecting comparable operational data during the Water phase. Independently of that decision, the next planned steps are to activate BLS-backed committee participation and begin testing Leios parameter combinations across distributed infrastructure. Those changes would move Musashi Dojo from proving that nodes can join the network to measuring which configurations can support a future mainnet release candidate.