The engineering firm Input Output, responsible for building and maintaining the Cardano blockchain, is requesting approximately half of its previous year’s funding from the project’s community treasury. On Tuesday, it submitted nine proposals totaling $46.8 million for 2026, a significant decrease from last year’s request of $97.5 million. These proposals predominantly focus on scaling Cardano to enhance transaction processing and expanding into Bitcoin-based decentralized finance (DeFi).
Funded by network fees collected within the blockchain’s shared pool, community representatives vote to allocate these funds for development purposes. Historically, Input Output has been the major beneficiary due to its employment of most engineers working on the underlying software.
This year’s reduced request marks a strategic move toward reducing dependency on these funds. Input Output plans to gradually decrease its funding requests annually until it can sustain itself through revenue, allowing community funds to support a wider array of smaller engineering groups. By 2026’s end, specialized teams like VacuumLabs and Midgard Labs are anticipated to handle much of the work currently managed in-house by Input Output.
The nine proposals fall into two main categories: funding for Leios, a consensus upgrade expected to enhance Cardano’s transaction capacity by 10 to 65 times, aiming for over 1,000 transactions per second. This would position Cardano competitively with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June with full deployment planned by year-end.
The other major proposal supports Pogun, which seeks to integrate Bitcoin DeFi into Cardano. This system allows bitcoin holders to borrow and generate yield on their holdings via Cardano without involving centralized intermediaries. The lending aspect of Pogun is expected for public release in the second quarter.
Additional proposals focus on improving Cardano’s smart contract engine performance, enhancing security testing infrastructure, developing tools for developers, and broadening API services. Each proposal specifies delivery leads and links funding to milestone achievements rather than offering upfront payments, akin to staged contractor payments during construction projects.
Voting commenced Tuesday and will conclude on May 24. Approximately 1,000 elected delegates known as DReps, representing ADA holders similarly to proxy representatives in public companies, will make the decisions. Charles Hoskinson, Input Output’s founder, is set to address these delegates directly through a video this week.
This vote will examine whether Cardano’s governance framework treats Input Output like any other applicant or continues to favor its requests based on historical deference. Although last year’s $97.5 million proposal was approved, the interim period has seen the Cardano Foundation take over the project’s grant-funding arm and Intersect assume responsibility for core software stewardship—introducing viable alternatives to Input Output.
Input Output also highlighted ecosystem progress in its announcement. The newly launched Cardano stablecoin, USDCx, quickly circulated 14.6 million tokens within weeks of release. Total assets deposited on the network increased from $137.5 million to $142.7 million during this period.
The outcome—whether proposals are fully funded, partially approved, or altered by DReps—will reflect the extent to which Cardano’s community has embraced new funding strategies now that alternatives exist.