The leading software lab behind the Cardano blockchain, Input Output Global (IOG), has reduced its funding request by half to $46.8 million for its operations through 2026. This revised proposal is directed at the network’s decentralized governance body, reflecting a strategic shift towards engaging specialized third-party firms for more engineering tasks.
The nine-part budget, significantly lower than the $97.5 million allocated in 2025, emphasizes two primary objectives: developing new decentralized finance (DeFi) solutions to unlock Bitcoin’s idle liquidity and scaling Cardano’s base layer to meet its ambitious Vision 2030 goals. Historically dominating the use of network transaction fees for treasury funding, IOG is now transitioning away from this dependency.
By year-end 2026, external entities like Midgard Labs and VacuumLabs are expected to assume significant portions of the development workload. The largest segment of the $46.8 million proposal focuses on ‘Leios,’ a comprehensive consensus upgrade aimed at enhancing Cardano’s transaction processing capabilities. This is crucial for achieving Vision 2030, which envisions scaling from 800,000 monthly transactions to over 27 million.
Currently constrained by mainnet finality times of about two hours and transaction speeds of 7-10 per second, Cardano aims to surpass these limitations through Leios. By incorporating Endorser Blocks and committee-based validation, the upgrade could boost processing capacity by 10 to 65 times. If successful, this would enable over 1,000 transactions per second, ensuring economic self-sustainability via fee revenue.
The development schedule is aggressive, with an early public testnet planned for June 2026 and a mainnet release candidate expected by year-end. IOG is also investing in off-chain scaling solutions like the Hydra protocol for zero-fee micropayments and Midgard’s permissionless optimistic rollup to reduce Layer-2 transaction costs.
Additionally, the ‘Pogun’ project aims to integrate Bitcoin as productive capital on Cardano, leveraging its EUTXO model. This initiative will begin with a non-margin credit market in Q2 2026, followed by a yield-generating DeFi app and a trust-minimized BitVM-powered bridge in later quarters.
To foster ecosystem growth, substantial funds are allocated to enhancing developer tools. IOG aims to increase developer onboarding rates by 30% through improvements like optimizing Plutus for faster execution and reduced script preparation times. New tooling frameworks will simplify project launches from days to minutes by eliminating complex prerequisites.
This comprehensive strategy is detailed in the funding proposal, which appeared first on CryptoSlate.