How Ouroboros Leios will change the Cardano Consensus

Cardano uses PoS consensus, which at the time of writing is capable of processing 300 simple transactions per second. That’s almost 50 times more than the PoW consensus that Bitcoin uses. However, for the global financial system, this is still insufficient. The IOG team is working on a new version of PoS which they have named Ouroboros Leios.

The Blockchain Trilemma

The developer team of any blockchain network balance three key characteristics, which are security, decentralization, and scalability. The blockchain trilemma refers to a widely held belief that decentralized networks can only provide two of three benefits at any given time. Security is an unconditional feature that cannot be compromised. Teams balance mainly between decentralization and scalability. However, preferring scalability over decentralization is not the best solution, as decentralization is a key feature of the blockchain industry. Moreover, as decentralization decreases, the Nakamoto coefficient decreases as well so does security.

Creating a blockchain network that achieves high scalability while not sacrificing decentralization and security is still a technological challenge for the blockchain industry. Cardano is currently one of the most decentralized networks, with over a thousand pool operators producing…