Input Output Cardano Funding Drops to $46.8 Million for Leios and Pogun

Input Output Cardano funding just got cut almost in half. The engineering firm that built the Cardano blockchain and still writes most of its core software filed nine proposals worth $46.8 million with the project’s community treasury on Tuesday, roughly half the $97.5 million it secured for 2025. Two flagship line items dominate the request: a consensus upgrade called Leios meant to push Cardano past 1,000 transactions per second, and a Bitcoin DeFi system called Pogun that would let BTC holders earn yield on Cardano without handing over custody. Voting opens Tuesday and closes May 24.

Why Input Output Cardano Funding Was Cut Almost in Half

The short answer is that Input Output is trying to make itself less necessary. The longer answer is more interesting. For years, the firm has been the single largest recipient of Cardano treasury dollars because it employed most of the people actually writing the code. That arrangement worked when there was no one else to write it. It does not work as well now that other teams exist.

The nine-proposal package filed on the Input Output Cardano funding portal is the first concrete step in what the company describes as a multi-year wind-down of its treasury dependence. Input Output says it will shrink its annual request each year until it can run on its own revenue. Community funds, in theory, flow to a broader set of smaller engineering shops instead.

By the end of 2026, Input Output expects specialized teams to take on most of the work it currently handles in-house. Firms like VacuumLabs and Midgard Labs, each focused on specific layers of the Cardano stack, are named in the filing as examples of the kind of groups that should inherit work. Think of it as a general contractor breaking up a monolithic contract and handing pieces to subcontractors who already know the blueprints.

That is the official version. The cynical read is that Input Output saw the political wind shift and priced its ask accordingly. Last year’s $97.5 million passed without much friction. This year’s vote happens under a governance body that has been handed the keys to core Cardano software, and a foundation that now controls grants. Asking for the same figure again would have been a dare.

Leios: The Scaling Bet Inside the $46.8 Million Ask

How does Leios change Cardano throughput?

Leios is the larger of the two flagship proposals and the one Input Output is staking its reputation on. The company claims the upgrade will lift Cardano’s transaction processing capacity by 10 to 65 times, targeting more than 1,000 transactions per second. If that number lands, Cardano moves out of the slow-chain bucket and into the same conversation as Solana and the fastest Ethereum layer-2 networks on throughput alone.

The architecture is a consensus redesign, not a patch. A test release is scheduled for June. Full deployment is set for year-end. You can read the technical framing directly from the scaling team behind Leios, which has been publishing research updates for the better part of a year.

Throughput alone does not win blockchains anymore. What Leios buys Cardano is the right to compete for payment-style applications, stablecoin rails, and high-frequency DeFi, categories that quietly left Cardano years ago. Whether those use cases come back is a separate question. The engineering has to work first.

By the end of 2026, Input Output expects smaller, more specialized teams to take on most of the work it currently does in-house.

Pogun Brings Bitcoin DeFi to Cardano, If It Ships

The second flagship is Pogun, a system designed to drag Bitcoin into Cardano’s DeFi layer without asking BTC holders to trust a custodian. In practice, that means a bitcoin holder could borrow against their coins or earn yield through Cardano contracts while keeping the underlying BTC non-custodial. The lending component is targeted for public release in the second quarter.

Bitcoin DeFi has been the white whale of several chains. Stacks built an entire thesis on it. Babylon built another. The Cardano pitch is different in one respect: it does not require a new L1. It wires Bitcoin liquidity into an existing smart contract platform that already has a working stablecoin and a treasury willing to pay for the integration work.

Does it work? That depends on whether Cardano’s developer base picks up the primitives once they ship. Shipping the code is the easier half. Getting applications built on top of it is the part that killed Cardano DeFi pushes in previous cycles.

• Non-custodial: BTC holders keep control of their keys
• Lending first: Borrow-and-yield product targeted for Q2 release
• Cardano-native: Runs on existing Plutus smart contracts, no new chain

The Other Seven Proposals and How Payment Works

Beyond Leios and Pogun, the seven smaller proposals cover what you would expect from a core engineering firm: performance improvements to Cardano’s smart contract engine, security testing infrastructure, developer tooling, and expanded API services. None of these will make headlines on their own. All of them are the plumbing that decides whether the headline features actually work in production.

The structural detail that matters more than any single proposal is the payment model. Each line item names specific delivery leads and ties funding to delivery milestones rather than releasing money upfront. Imagine paying a contractor in stages as different parts of a house are completed, instead of handing over the full budget on day one.

That is a significant governance shift, even if Input Output frames it as best practice. For years, the treasury gave money against promises. Now it pays against delivery. DReps who want to kill a line item mid-contract have a cleaner mechanism to do it. That changes the incentive structure for everyone submitting proposals, not just Input Output.

Who Actually Votes on This, and When?

Voting opens Tuesday and runs through May 24. The decisions are made by roughly 1,000 elected delegates known as DReps, who represent ADA holders the way proxy representatives do in a publicly traded company. Charles Hoskinson, founder of Input Output, is scheduled to release a video this week making the case directly to those delegates.

The vote is a real test of Cardano’s governance, which has expanded significantly over the past two years. The question is whether DReps treat Input Output like any other grant applicant or continue to approve its requests largely out of deference. Last year’s $97.5 million proposal passed. In the interim, the Cardano Foundation has taken over the project’s grant-funding arm and Intersect, the governance organization running this vote, has assumed stewardship of core Cardano software.

Both shifts mean functional alternatives to Input Output now exist in a way they did not when earlier votes went through. That is the real story. A governance body can only hold a developer accountable if it has somewhere else to turn. For the first time, Cardano arguably does.

What the Ecosystem Numbers Say Right Now

Input Output also used the filing to point at traction. A new Cardano stablecoin, USDCx, reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano, a common measure of network usage, rose from $137.5 million to $142.7 million over the same period.

Those are not blowout numbers. They are steady ones. In a cycle where competing L1s have been bleeding TVL, a small uptick counts as a signal that something is working. Whether it is enough to justify another $46.8 million from the treasury is exactly the question DReps have to answer.

The counterargument writes itself. If Cardano’s ecosystem is finally growing, why hand the lion’s share of the budget back to the firm that has been running the show for years instead of seeding the smaller teams that have emerged around it? That is the argument at least some DReps will make, and it is the reason this vote is not a formality.

What a Partial Approval Would Actually Mean

The most likely outcome is not a clean yes or a clean no. It is a partial approval, with DReps green-lighting the Leios and Pogun flagships and trimming or reshaping some of the smaller proposals. That is how mature treasuries tend to work once alternatives exist.

A partial approval would send a message without blowing up the relationship. It tells Input Output that the community wants the headline engineering but is no longer willing to fund every adjacent line item by default. It also gives smaller teams a shot at the leftover budget, which is exactly the outcome Input Output says it wants anyway.

The other scenario, a full approval, would suggest the governance expansion of the past two years has been mostly cosmetic. The tools to hold Input Output accountable exist. Whether DReps use them is the thing to watch.

This article is for informational purposes only and does not constitute investment advice. Every investment and trading decision involves risk. Readers should conduct their own research before making any financial decisions.