Input Output, the private engineering firm responsible for the creation and ongoing development of the Cardano blockchain, has recently modified its funding request from the community treasury, revealing a significant reduction compared to the previous year. The company submitted nine proposals amounting to $46.8 million for the year 2026, a steep decline from the $97.5 million requested for 2025.
The primary focus of these proposals is centered around scaling the Cardano blockchain to enhance its transaction processing capabilities while also seeking to expand into Bitcoin decentralized finance (DeFi). Like many prominent blockchain platforms, Cardano operates with a collective pool of funds sourced from network fees. Community representatives play a crucial role in the allocation of these funds for development purposes. Historically, Input Output has been the largest beneficiary of this funding due to its employment of a significant number of engineers who are integral to building the blockchain’s core software.
This latest funding request embodies Input Output’s strategic shift to diminish its reliance on community treasury support. The company aims to gradually reduce its annual funding requests each year, with aspirations to become self-sustaining through its own revenue by the end of 2026. Consequently, community funds are expected to be redirected toward smaller engineering firms that will take over many of the current development responsibilities.
The nine proposals submitted are categorized into two primary themes. The more substantial of the two seeks to fund a major consensus upgrade known as Leios. Input Output asserts that this upgrade could increase Cardano’s transaction processing capacity by a factor of 10 to 65, potentially allowing the network to handle over 1,000 transactions per second. This improvement would place Cardano in a more competitive position alongside fast transaction networks, such as Solana and advanced Ethereum layer-2 solutions. A test version of Leios is scheduled for release in June, with full deployment anticipated by the end of the year.
The second notable proposal revolves around the development of a system called Pogun, which aims to facilitate Bitcoin-based decentralized finance transactions within the Cardano ecosystem. This system would enable Bitcoin holders to borrow against their assets and earn yields without relinquishing control to centralized intermediaries. The lending functionalities of Pogun are slated for a public release in the second quarter of the year.
Additionally, the smaller proposals delve into various aspects of improving Cardano’s overall performance, which includes enhancements to its smart contract engine, security testing infrastructures, developer tools, and expanded API services. Each proposal outlines specific delivery teams and links funding to key milestones, ensuring that financial disbursements occur in stages, similar to paying a contractor incrementally based on project completion.
Voting on these proposals began recently and will continue until May 24. The decisions will be made by approximately 1,000 elected representatives known as DReps, who represent ADA holders in a manner akin to proxy representation in publicly traded entities. Charles Hoskinson, the founder of Input Output, is expected to release a video aimed at persuading the delegates to approve the proposals.
This voting process will serve as a critical test of Cardano’s governance structure, which has significantly evolved over the past two years. It will determine whether Input Output will be treated on equal footing with other grant applicants or if its proposals will continue to receive preferential treatment based on historical deference.
Last year, Input Output’s funding request of $97.5 million was approved, but changes in the ecosystem may influence the outcome of this year’s vote. Notably, the Cardano Foundation has taken control of the project’s grant-funding operations, while the governance organization Intersect now oversees core Cardano software development.
In conjunction with these developments, Input Output has reported positive growth within the Cardano ecosystem. The recently launched stablecoin, USDCx, reached a circulation of 14.6 million tokens mere weeks after its introduction. Additionally, total assets deposited within the Cardano network experienced an increase from $137.5 million to $142.7 million within the same timeframe.
The eventual outcome of the voting process—whether the complete slate of proposals is passed, partially funded, or entirely reshaped—will provide insight into the evolving mindset of the Cardano community, especially in light of the newly available alternatives for funding development independently of Input Output.
