Input Output, the engineering firm behind the Cardano blockchain, has significantly reduced its funding request for 2026, signaling a strategic shift toward decentralization and long-term sustainability. The company has submitted nine proposals totaling $46.8 million to the Cardano treasury—down sharply from the $97.5 million requested in 2025.
Shift Toward Self-Sustainability and Ecosystem Growth
The reduced funding request reflects Input Output’s broader plan to gradually decrease its reliance on Cardano’s community treasury. Historically, the company has been the largest recipient of these funds, as it employs a majority of the engineers responsible for building and maintaining the blockchain’s core infrastructure.
Going forward, Input Output aims to transition toward a model where it can sustain operations through independent revenue streams. This shift would allow treasury funds to be distributed more broadly across smaller, specialized development teams.
By the end of 2026, companies such as VacuumLabs and Midgard Labs are expected to take on a larger share of development responsibilities, marking a decentralization milestone for the Cardano ecosystem.
Focus Areas: Scaling and Bitcoin DeFi
Leios Upgrade Targets Massive Throughput Gains
A major portion of the requested funding is allocated to Leios, a next-generation consensus upgrade designed to significantly improve Cardano’s transaction processing capacity.
- Projected throughput increase: 10x to 65x
- Target performance: 1,000+ transactions per second (TPS)
- Testnet launch: June 2026
- Full deployment: By end of 2026
If successful, Leios could position Cardano alongside high-performance networks like Solana and leading Ethereum Layer-2 solutions in terms of raw throughput.
Pogun Brings Bitcoin DeFi to Cardano
The second flagship initiative, Pogun, aims to unlock decentralized finance use cases for Bitcoin holders within the Cardano ecosystem.
This system would allow users to:
- Borrow against Bitcoin holdings
- Earn yield without centralized custody
- Access DeFi tools using BTC liquidity
The lending component of Pogun is expected to launch publicly in Q2 2026, potentially expanding Cardano’s role in cross-chain DeFi innovation.
Additional Development Proposals
Beyond its flagship initiatives, Input Output’s proposal package includes funding for:
- Smart contract performance optimization
- Security testing and auditing infrastructure
- Developer tooling enhancements
- Expanded API services for builders
All proposals are structured with milestone-based funding, ensuring capital is distributed incrementally as development targets are met—similar to phased payments in construction projects.
Governance Vote and DRep Decision-Making
The proposals will be decided through Cardano’s decentralized governance system. Voting begins immediately and runs through May 24, 2026.
Approximately 1,000 Delegated Representatives (DReps) will cast votes on behalf of ADA holders, functioning similarly to proxy voters in traditional corporate governance.
Charles Hoskinson, founder of Input Output, is expected to release a public video addressing DReps and advocating for the proposals.
A Critical Test for Cardano Governance
This funding round represents a key moment for Cardano’s evolving governance model. Unlike previous years, the ecosystem now has alternative organizations capable of managing development funding and core infrastructure.
The Cardano Foundation has assumed control of grant distribution, while Intersect, the governance body overseeing this vote, now plays a central role in managing core protocol development.
These changes raise an important question: will Input Output continue to receive preferential support, or will it be evaluated on equal footing with other contributors?
Ecosystem Growth Signals Momentum
Input Output also highlighted recent growth metrics within the Cardano ecosystem:
- USDCx stablecoin reached 14.6 million tokens in circulation shortly after launch
- Total value locked (TVL) increased from $137.5 million to $142.7 million
These figures suggest steady adoption, even as the network undergoes structural and governance changes.
What Comes Next
The outcome of the vote—whether full approval, partial funding, or significant revisions—will serve as a barometer for Cardano’s decentralization progress.
More broadly, it will reveal how the community prioritizes scaling, cross-chain DeFi, and the redistribution of development power across a growing ecosystem of independent builders.
As Cardano moves toward a more decentralized funding model, the 2026 treasury vote could redefine how blockchain ecosystems allocate capital—and who gets to build the future of DeFi.
