The engineering firm behind Cardano wants half of what it asked for last year, signaling a shift toward self-sufficiency as it pitches a 10-65x throughput upgrade and a Bitcoin-native lending engine.
Input Output (IO), the principal engineering organization behind the Cardano blockchain, has submitted nine treasury funding proposals totaling $46.8 million for 2026 – nearly half the $97.5 million it requested from the community last year. The reduced ask signals a deliberate strategy to wean itself off community funding while doubling down on two headline projects: a consensus upgrade called Leios and a Bitcoin DeFi engine named Pogun.
The Leios Upgrade: Cardano’s Play for 1,000+ TPS
The largest chunk of funding targets Leios, a consensus upgrade that IO claims will increase Cardano’s Layer 1 transaction throughput by 10 to 65 times. If delivered as described, Leios would push Cardano past 1,000 transactions per second – competitive territory with Solana and the fastest Ethereum Layer 2 networks.
A testnet release is scheduled for June 2026, with full mainnet deployment targeted by year-end. The upgrade uses a pipelined consensus mechanism that separates transaction ordering from block finalization, allowing validators to process transactions in parallel rather than sequentially.
For context, Cardano currently handles roughly 40-50 TPS under typical conditions. Moving to 1,000+ TPS would represent a fundamental shift in the network’s competitive positioning – though the crypto field has seen plenty of throughput promises that failed to materialize in production.
Pogun: Bringing Bitcoin Holders Into Cardano DeFi
The second flagship proposal funds Pogun, an end-to-end Bitcoin DeFi engine designed to let BTC holders borrow, lend, and earn yield through Cardano without surrendering custody to a centralized intermediary.
Pogun’s architecture includes three components: a trust-minimized Bitcoin bridge, a non-margin credit market, and yield infrastructure for wrapped BTC positions. The lending component targets a public release in Q2 2026.
The pitch is straightforward – billions of dollars worth of Bitcoin sits idle in cold storage, generating zero yield. If Pogun can offer a credible, non-custodial path to productive Bitcoin capital, it could attract a meaningful slice of BTC liquidity to Cardano’s system.
A Deliberate Drawdown in Community Funding
The 50% reduction in funding isn’t accidental. IO has publicly stated its intention to shrink annual treasury requests until the company can sustain operations on its own revenue streams. The plan envisions smaller, specialized firms like VacuumLabs and Midgard Labs absorbing work currently handled in-house by IO engineers.
“By the end of 2026, we expect these teams to take on most of the maintenance and development work we currently do ourselves,” IO said in its funding submission.
Each of the nine proposals ties funding to delivery milestones rather than releasing money upfront – a structure designed to address community concerns about accountability that surfaced during last year’s larger request.
Governance in Action: DReps Hold the Purse Strings
Voting on the proposals opened Tuesday and runs through May 24. Roughly 1,000 elected delegates known as DReps – who represent ADA token holders similar to proxy representatives at a public company – will decide whether to approve, modify, or reject the slate.
The vote carries extra weight this year. The Cardano Foundation has taken over the project’s grant-funding arm, and Intersect, the governance organization overseeing the vote, has assumed stewardship of core Cardano software. Both shifts mean alternatives to IO now exist in ways they didn’t during previous votes.
Charles Hoskinson, IO’s founder, is expected to release a video this week making a direct case to delegates. Whether the community treats IO’s reduced ask as a sign of maturity or simply rubber-stamps it will test how far Cardano’s governance has evolved.
System Metrics Show Growth
IO’s submission also cited recent system wins. USDCx, a Cardano-native stablecoin, reached 14.6 million tokens in circulation within weeks of launch. Total value locked on Cardano rose from $137.5 million to $142.7 million over the same period – modest by Ethereum or Solana standards, but a directional improvement.
ADA traded around $0.58 at press time, roughly flat over the past week but up 12% month-over-month. The token’s price action in the coming weeks may depend partly on how markets interpret the Leios and Pogun progress.
FAQ
What is the Cardano Leios upgrade?
Leios is a consensus upgrade designed to increase Cardano’s transaction throughput by 10-65 times, targeting over 1,000 TPS. A testnet is scheduled for June 2026 with mainnet deployment by year-end.
What is Pogun on Cardano?
Pogun is a Bitcoin DeFi engine being built on Cardano that allows Bitcoin holders to borrow, lend, and earn yield without custodial intermediaries. It includes a trust-minimized BTC bridge and non-margin credit markets.
When does voting on Cardano’s funding proposals end?
Voting runs through May 24, 2026, with roughly 1,000 elected delegate representatives (DReps) casting votes through Intersect’s governance platform.
