Cardano pushes scaling upgrades as ADA slides and wallet hack hits

Cardano is moving ahead with two major protocol changes, but investors are seeing a split between technical progress and weak market confidence. ADA was trading near $0.14, its lowest level since 2020, after falling more than 55% this year. Derivatives data showed more accounts leaning long than short on Binance and OKX, yet larger traders on Binance were still slightly net short overall, pointing to cautious bottom-fishing rather than a firm shift in sentiment.

Pressure on the ecosystem grew after SecondFi, the successor to the Yoroi wallet, disclosed a flaw in software used to generate Cardano wallets. The company said about 16 million ADA was lost across 374 addresses, worth roughly $2.4 million at recent prices. It also said emergency action secured about 129 million ADA before attackers could withdraw it. SecondFi has patched unaffected accounts, warned users not to restore compromised recovery phrases in other wallets, and opened a claims process.

At the protocol level, Input Output launched the Musashi Dojo public testnet for Ouroboros Leios, a scaling design aimed at lifting base-layer throughput by 5x to 20x without replacing Cardano's consensus system. Cardano is also advancing the Van Rossem hard fork through governance. As Epoch 638 neared its end, 86% of block production was on node version 11, while exchange readiness by liquidity was 50.24%.