Input Output, the engineering firm behind the Cardano blockchain, has submitted nine proposals requesting a total of $46.8 million for the 2026 funding cycle. This amount represents a significant reduction from the $97.5 million sought in 2025.
The proposals primarily aim to enhance Cardano’s transaction processing capabilities and expand its involvement in Bitcoin decentralized finance (DeFi). Cardano operates a community treasury funded by network fees, which is allocated through a voting process involving community representatives.
Historically, Input Output has been the largest beneficiary of these funds, given its role as the primary developer of the Cardano software. The company has indicated that this reduced funding request is part of a broader strategy to decrease its reliance on community funds. Input Output plans to progressively lower its annual funding requests until it can sustain its operations through its own revenue, allowing community funds to support a wider array of smaller engineering teams.
By the end of 2026, Input Output anticipates that more specialized teams will undertake many of the tasks currently handled in-house, including collaborations with firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano ecosystem.
The proposals fall into two main categories. The first includes funding for a consensus upgrade named Leios, which is projected to enhance Cardano’s transaction throughput by a factor of 10 to 65, aiming for over 1,000 transactions per second. This upgrade is expected to position Cardano more competitively alongside faster blockchains such as Solana and certain Ethereum layer-2 solutions. A test release of Leios is scheduled for June, with full deployment anticipated by the end of the year.
The second key proposal involves a system called Pogun, designed to facilitate Bitcoin-based decentralized finance on the Cardano network. This system would enable Bitcoin holders to borrow and earn yields on their assets without transferring custody to a centralized entity. The lending feature of Pogun is expected to be publicly available in the second quarter of 2026.
Additional proposals address improvements to Cardano’s smart contract engine, security testing frameworks, developer tools, and expanded API services. Each proposal specifies delivery leads and links funding to achievement of specific milestones, akin to a phased payment schedule for construction projects.
The voting period for these proposals commenced on Tuesday and will continue until May 24. Approximately 1,000 elected delegates, known as DReps, will make the final decisions, representing ADA holders similarly to proxy representatives in corporate governance. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week to appeal directly to these delegates.
This voting cycle will serve as a critical test of Cardano’s governance structure, which has evolved significantly over the past two years. The outcome will indicate whether Input Output is treated like any other applicant for funding or if it continues to receive preferential treatment.
Last year, the $97.5 million proposal was approved, but recent changes have introduced new dynamics. The Cardano Foundation has assumed control of the project’s grant funding, and the governance organization Intersect now oversees the core software. These developments provide alternatives to Input Output that were not available during previous funding rounds.
In its announcement, Input Output also noted positive developments within the Cardano ecosystem. A new stablecoin, USDCx, has achieved a circulation of 14.6 million tokens shortly after its launch. Additionally, total assets deposited on the Cardano network increased from $137.5 million to $142.7 million during the same period.
The final outcome of the proposals will reflect the Cardano community’s evolving perspective on funding development, particularly in light of the new mechanisms available for financing without Input Output’s direct involvement.
Input Output, the developer of Cardano, has reduced its funding request for 2026 to $46.8 million, focusing on scaling and Bitcoin DeFi. This shift reflects a strategic move to lessen dependence on community funds and promote smaller engineering teams.