Shaping Cardano's future: Input | Output Engineering development proposal

In the new era of community-led governance, all of us will shape Cardano’s next chapter. Input | Output Engineering (IOE) has proposed roadmap priorities focused on scalability, usability, and interoperability. These initiatives, working in harmony with strong proposals from the wider developer community, are designed to take Cardano where it needs to go next, contributing to a holistic vision for the platform's future.

This proposal outlines the key developments aimed at enhancing Cardano's core infrastructure, smart contract capabilities, scaling solutions, and user experience.

The proposed roadmap has already received a high level of support from across the community. It presents a comprehensive and interconnected set of initiatives, a unified body of work that combines each individual component into a cohesive whole intended to achieve the full range of anticipated benefits.

Maintenance and support – ensuring stability, performance, and security

Keeping Cardano stable, performant, and secure involves far more than coding; it's about preserving knowledge, reducing complexity, and empowering contributors across the ecosystem. IOE’s proposal for the second half of 2025 through the first half of 2026 outlines continued support for the Cardano codebase and infrastructure, including fixing issues, addressing technical debt, and improving performance.

Long-term sustainability also requires clarity. Many developers find it challenging to build new tools or deeply understand the core functions of the Cardano node due to extensive but dispersed documentation, which often uses dense formal methods syntax mixed with Haskell implementation details. This can limit broader contribution and understanding.

Creating a unified Cardano Blueprint addresses these challenges. The goal is for existing node documentation to be community-owned, useful, and understandable by anyone building node implementations in any language. This would significantly ease development, allowing developers unfamiliar with Haskell/Agda to grasp node functions efficiently. This initiative opens doors for more community contributions, alternative node implementations, and deeper technical understanding across the ecosystem. Cardano Blueprint will cover crucial areas like consensus, network, ledger, and Plutus. It is designed as an ongoing process that is continuously updated as node functionality evolves. It's a grassroots effort to make Cardano even more open and understandable for everyone.

Tiered pricing model – predictable timing and costs for transactions

The Cardano network has experienced occasional congestion during peak times, leading to unpredictable delays. Users can face disruptions to critical, time-sensitive transactions, resulting in frustration and potential financial risk.

The proposed tiered pricing model introduces a prioritization mechanism for Cardano transactions, powered by AI-based congestion pattern analysis. Users can select from three transaction channels – standard, priority, and assured – offering different fee levels and block inclusion expectations. This flexible system allows users to choose the priority and cost of their transactions to meet specific needs, ensuring timely inclusion of urgent transactions. This improves overall user experience and supports network growth.

The tiered pricing model aims to offer more control over transaction processing and is also part of ongoing discussions around node implementation improvements.

Node modularity through architectural refresh (Acropolis)

The Cardano node architecture refresh project shifts the node architecture to a modular, event-based model named Acropolis (ancient Greek for 'high city'). This redesign aims for greater accessibility, extensibility, and throughput, supporting ecosystem growth.

A modular node design allows independent component development in various languages. This simplifies the addition of new features, improves integration for DApps and partner chains, and offers more flexible, scalable deployment options.

This refresh paves the way for a more versatile and community-driven node.

Revised stake pool incentive scheme – fostering ecosystem diversity

Smaller stake pool operators (SPOs), especially single pools, often struggle to compete with larger multi-pool operations. This can reduce diversity and make it harder for new SPOs to join the Cardano ecosystem.

This project will explore providing incentives for smaller pools, considering existing proposals, and identifying potential improvements. The community will benefit from greater diversity in stake pool offerings and healthier small pools, while stake pools themselves will thrive in a fairer and more equitable playing field.

Hydra development – Cardano's layer 2 scaling solution

The Hydra Head protocol is a layer 2 scaling solution for Cardano, rooted in peer-reviewed research that increases transaction throughput and ensures cost efficiency while maintaining rigorous security.

Hydra uses isomorphic multi-party state channels, enabling off-chain ledgers with custom parameters for transactions and smart contracts, settling efficiently to layer 1. Hydra heads offer virtually unlimited scaling potential, reducing friction points like fees and settlement times, benefiting from Cardano's layer 1 security while allowing application-specific customization.

This proposal aims to support the completion of Hydra v1.0 on mainnet, continued efforts towards a light-weight node, and interoperability with Bitcoin Lightning, along with a full audit of Cardano’s layer 2 state channel solution.

Mithril development – secure, decentralized blockchain data access

Securely syncing with the Cardano blockchain often requires running a full node, which is resource-intensive and can limit accessibility, pushing users towards centralized intermediaries. Mithril advances work on secure, decentralized access to blockchain data without needing to sync a full node.

Mithril leads to faster bootstrapping and sync times for full-node applications, provides secure, efficient access for light clients (wallets, mobile apps), and enhances layer 2 protocols, supporting scaling solutions.

Leios – increasing network throughput

The Cardano mainnet can experience congestion with high transaction volumes, and emerging use cases will demand even higher throughput capabilities. Leios is designed to increase the network's throughput by optimizing the use of available resources and making transaction processing more efficient. Leios optimizes block production with a parallel block process where blocks are ranked and endorsed by SPOs. Leios aims to significantly increase transaction throughput on mainnet – an enhancement that will support a growing ecosystem and more demanding applications.

Plutus – enhancing smart contract capabilities

Plutus is Cardano’s smart contract backbone, purpose-built for on-chain efficiency and safety. Ongoing development will unlock new features, optimizations, and developer tooling, helping Cardano stay competitive, scalable, robust, and suitable for real-world applications.

The Plutus roadmap will focus on enhancing Plutus Core and Plinth (formerly Plutus Tx), including new primitives, language extensions, better developer tooling, and performance improvements, leading to lower fees, broader use cases, and a smoother developer experience. These features and upgrades mean more efficient contracts and a better experience for developers, with a more powerful Plutus stack opening the door to broader adoption and innovation on Cardano.

Static analyzer – detecting security flaws in smart contracts

Smart contract bugs or malicious code can lead to major financial losses. Traditional code reviews are slow, require deep expertise, and can still miss critical security or performance issues.

The static analyzer project proposes a one-click tool for Plinth that aims to instantly detect around 80% of common security flaws and performance issues in smart contracts, requiring no specialized expertise. This tool aims to offer significant cost savings by catching critical bugs early, boost productivity by streamlining code reviews, and improve code quality by automatically identifying vulnerabilities. With one click, the static analyzer will detect and report Plinth smart contract errors and inefficiencies, enabling developers to optimize code quality and best practices.

Automatic formal verification – proving DApp correctness

This proposal introduces an automated formal verification tool to prove that DApps do not exhibit any security vulnerabilities and behave as expected across all scenarios. It will offer the possibility to automatically generate properties showing the absence of common security vulnerabilities and deadlocks. For specific business logic, users are only required to annotate their smart contracts with the expected requirements. The tool will automatically and mathematically prove the correctness of the DApp against all possible blockchain events or return a set of blockchain events leading to a requirement violation or an exploited vulnerability. Although aimed at Untyped Plutus Core (UPLC) and Plinth in 2025, the tool’s core is adaptable to any other smart contract language by the simple addition of a translator module.

This initiative aims to deliver automated security verification and ensure the highest code quality, benefiting users and developers with greatly reduced vulnerabilities and significantly increased trust in Cardano's DApp ecosystem.

Property-based testing – automated edge-case testing for smart contracts

Hidden bugs, especially hard-to-find 'edge cases', can lurk in smart contracts. Currently, the Cardano ecosystem could benefit from specific property-based testing (PBT) tools for smart contracts, as their absence means smart contracts are more exposed to undetected issues and potential security flaws, posing significant risks.

A proposal is in place for the Plinth PBT tool, designed to perform property-based testing on Plinth smart contracts. By automatically generating a wide range of inputs and actions to test against the specified properties of a contract, it ensures that the contract behaves as expected.

This tool will help developers identify edge cases, validate assumptions, improve contract robustness, and check against known vulnerabilities. It integrates seamlessly into the Plinth development workflow, enabling more rigorous and automated testing, ultimately enhancing the reliability and security of Plinth scripts. Benefits include reduced financial losses by preventing costly bugs and exploits, increased confidence by building trust in Cardano’s smart contracts, and enhanced code quality by boosting contract robustness. PBT also bridges a critical gap in Cardano's security infrastructure and integrates seamlessly into the Plutus development workflow.

Nested transactions (Babel fees) – seamless non-ada token transactions

Non-ada holders face barriers when interacting with Cardano, as they cannot easily pay transaction fees, supply min-UTXO value, or provide script collateral, limiting accessibility. The Babel fees project proposes 'nested transactions,' a ledger design change that supports transaction batching. This allows users to seamlessly use tokens other than ada for fees and other ada-specific requirements. This feature will onboard more users to Cardano, make multi-user, multi-UTXO asset swaps cheaper and faster, and is a step towards supporting arbitrary intents on the network. Babel fees could revolutionize how users interact with Cardano using various tokens.

Ledger on disk – lowering memory use for scalability

As Cardano grows, keeping the entire ledger state in memory becomes unsustainable for node operators. The ledger on disk project will alter the Haskell consensus layer design to move remaining large tables of the ledger state (like reward accounts and stake distributions) to a disk database. Implementing ledger on disk will significantly reduce node RAM requirements, making running a Cardano Haskell node more sustainable in the long term, which is crucial for high-throughput solutions like Leios. This project is key to the Haskell node’s long-term scalability.

KES agent – a smarter way to protect Cardano keys

Cardano’s Ouroboros Praos protocol demands true forward security for Key Evolving Signature (KES) keys. Current disk storage cannot guarantee irrecoverable deletion, which is vital because if KES keys are not securely erased, they could be used to forge block history via long-range attacks. The KES agent provides an in-memory solution for managing KES keys, ensuring that KES signing keys never touch storage and are securely erased after each rotation, upholding Praos’ core security design.

Identus – enhancing Self-Sovereign Identity capabilities

Broader adoption of Self-Sovereign Identity (SSI) capabilities like decentralized identifiers (DIDs) and verified credentials (VCs) within the Cardano ecosystem requires robust, accessible, and standardized solutions, including offline-first approaches. The Identus roadmap executes plans to enhance SSI capabilities, including offline-first solutions, lightweight infrastructure, and education to drive adoption of DIDs and VCs on Cardano.

Identus will bring standards-compliant identity solutions to Cardano projects, enabling interoperability and supporting KYC compliance use cases, ultimately onboarding more users. The Identus project strengthens digital identity on Cardano.

Conclusion

These proposed roadmap priorities from IOE are foundational to Cardano's evolution, underscoring a commitment to scalability, usability, and interoperability. By addressing core technical challenges and enhancing developer and user experiences, these initiatives aim to solidify Cardano's position as a robust, secure, and accessible blockchain platform.

The ongoing development efforts, from fundamental infrastructure improvements to advanced smart contract tooling, reflect a comprehensive vision for a community-led future, fostering greater participation and innovation across the ecosystem.

Learn more:

• Explore Cardano's 2025 vision and roadmap
• Dive deeper into Cardano node evolution
• Discover Hydra
• Understand Mithril’s benefits
• Read about Ouroboros Leios
• Learn about Plutus and Plinth
• Explore Babel fees
• Find out more about Hyperledger Identus.