Input Output Global, the main software lab behind the Cardano blockchain, has halved its annual request for treasury funding and asked the network’s decentralized governing body for $46.8 million to fund its operations through 2026.
This decline marks a purposeful transition away from the dominance of a single entity, shifting the ecosystem toward a future where specialized third-party companies take on a greater share of technical tasks.
The nine-part funding slate, which is down sharply from the $97.5 million approved for 2025, places high priority on two critical mandates: capturing idle Bitcoin liquidity through new decentralized finance (DeFi) architectures and aggressively scaling the network’s base layer to achieve the ecosystem’s ambitious “Vision 2030” goals.
Cardano, currently ranked among the largest cryptocurrencies by market capitalization, controls a multi-million dollar community treasury fueled by network transaction fees.
Historically, Input Output has held the lion’s share of these funds. However, under a revised operational strategy, the company plans to reduce its financial dependence on the treasury every year.
By the end of 2026, third-party contractors such as Midgard Labs and VacuumLabs are expected to inherit significant portions of the protocol’s internal development pipeline.
Cardano scales up for ‘vision 2030’
The largest allocation within the $46.8 million proposal is for “Leios,” a major consensus upgrade designed to transform Cardano’s transit capabilities.
Input Output executives say that to reach the network’s Vision 2030 milestone, from a current baseline of 800,000 monthly transactions to more than 27 million, the base layer will need a major overhaul.
Currently, Cardano’s finality on the mainnet hovers around two hours, with transaction speeds of around 7 to 10 per second. This bottleneck has historically kept the blockchain out of high-frequency enterprise applications, ceding ground to faster rivals like Solana and various Ethereum Layer-2 networks.
Leios aims to bridge this gap without sacrificing the fundamental security of the network. By introducing a mechanism known as Endorser Blocks and implementing commission-based validation, the upgrade is expected to increase transaction processing capacity by 10 to 65 times.
If successful, it would push Cardano past the 1,000 transactions per second threshold, allowing it to generate enough fee revenue to remain economically self-sufficient.
The development timeline is aggressive, with an early public testnet planned for June 2026 and a mainnet release candidate expected by the end of the year.
Combined with the impending Layer-1 improvements, Input Output is also directing capital to off-chain scaling solutions.
This includes improving the production of the ‘Hydra’ protocol, a state channel solution designed for sub-second micropayments at no cost, and promoting ‘Midgard’, an optimistic permissionless rollup.
Midgard leverages Cardano’s unique accounting model to enable single-party fraud proofing, a technical feat that could theoretically drive Layer-2 transaction costs below one cent.
Tapping into the trillion-dollar Bitcoin market
While infrastructure upgrades dominate the tech roadmap, the most commercially aggressive initiative on the 2026 agenda is ‘Pogun’.
The project is a custom decentralized financial engine built to transform the world’s most valuable crypto project, Bitcoin, into productive capital on the Cardano blockchain.
Input Output is betting that Cardano’s underlying architecture, the Extended Unspent Transaction Output (EUTXO) model, gives it a clear structural advantage over Ethereum-style account models.
Because Cardano’s accounting framework maps directly onto Bitcoin’s, developers can build highly deterministic financial logic with predictable fees and no risk of maximum extractable value (MEV) manipulation.
The rollout of Pogun will take place over three quarters. In the second quarter of 2026, the team plans to launch a zero-margin credit market. Unlike conventional DeFi lending protocols that rely on volatile oracles and forced liquidations, Pogun’s lending market functions through bilateral agreements.
Borrowers and lenders will negotiate loan parameters directly so that collateral is only forfeited in the event of an outright default, and not during temporary intraday price fluctuations.
This will be followed by a decentralized application generating returns in the third quarter, allowing private users to deploy capital into fixed-term strategies without having to engage in complex negotiations.
Finally, Q4 will see the implementation of a trust-minimized, BitVM-powered bridge. The bridge uses a 1-of-N security paradigm, meaning that institutional custodians only need one honest operator, which could be the institution itself, to guarantee the security of their bridged Bitcoin.
Empower developers and upgrade Plutus
To ensure that these new L1 and L2 capabilities translate into measurable ecosystem growth, a significant portion of the budget is dedicated to updating developer tools.
Input Output has set a goal to improve its developer onboarding growth rate by at least 30% through a streamlined tech stack.
A core focus is optimizing Plutus, the compact programming language that underpins all Cardano smart contracts. Current execution costs and script preparation times place a burden on developers.
The 2026 proposal outlines targeted extensions of cryptographic primitives and the removal of unnecessary scope checking overhead, currently increasing script preparation time by approximately 25%.
These upgrades are designed to reduce on-chain execution costs, making complex decentralized applications economically viable.
The company is also introducing a ‘cardano-init’ command-line interface and an OpenZeppelin-style library of standardized, auditable smart contracts.
By removing cumbersome requirements such as Nix or native C library dependencies, the new tooling framework promises to reduce the time it takes for a new developer to launch a project from several days to just a few minutes.