Input Output, the private engineering company that built and continues to develop the Cardano blockchain, is seeking about half the funding it requested last year from the project’s community treasury.

The company submitted nine proposals totaling $46.8 million for 2026 on Tuesday, down from $97.5 million in 2025. Several of the proposals focus on scaling Cardano to increase its transaction processing capacity and expanding into Bitcoin DeFi.

Cardano, like most major blockchains, maintains a shared pool of money funded by network fees, which community representatives vote to allocate toward development work. Input Output historically has been the largest recipient because it employs most of the engineers building the underlying software.

The reduced ask is the first concrete step in a plan to phase out that dependency. Input Output said it now aims to shrink its annual request each year until the company can sustain itself on its own revenue, with community funds going instead to a broader set of smaller engineering groups.

By the end of 2026, Input Output expects smaller, more specialized teams to take on most of the work it currently does in-house, including firms such as VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software.

Scaling and bitcoin DeFi

The nine proposals group into two themes. The larger funds a consensus upgrade called Leios, which Input Output claims will increase Cardano’s transaction processing capacity by 10 to 65 times, targeting more than 1,000 transactions per second.

For context, that would move Cardano from a relatively slower chain to one competitive with Solana and the fastest Ethereum layer-2 networks on throughput alone. Leios is scheduled for a test release in June and full deployment by year-end.

The second flagship proposal funds a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. In practice, it would let bitcoin holders borrow and earn yield on their holdings through Cardano without giving custody to a centralized intermediary. Pogun’s lending component is targeted for public release in the second quarter.

Smaller proposals cover performance improvements to Cardano’s smart contract engine, security testing infrastructure, developer tools, and expanded API services.

Each proposal 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 at the start of construction.

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 much as proxy representatives do in a publicly traded company. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week making the case directly to those delegates.

The vote will test whether Cardano’s governance, which has expanded significantly over the past two years, treats Input Output like any other grant applicant or continues to approve its requests largely on a basis of deference.

Last year’s $97.5 million proposal passed, but 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 alternatives to Input Output now exist in a way they did not when previous votes went through.

Meanwhile, Input Output also cited progress in the ecosystem in its release. 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 a network’s usage, rose from $137.5 million to $142.7 million over the same period.

Whether the full slate passes, gets partially funded, or is reshaped entirely by DReps will signal how much the Cardano community’s thinking has shifted now that the tools to fund development without Input Output exist.

Real-time deepfakes, phishing attacks, supply chain compromises and cross-chain vulnerabilities will likely be the root of some of the biggest hacks in 2026, according to CertiK senior blockchain investigator Natalie Newson.

The industry has already lost over $600 million to hacks in 2026, due largely to two North Korea-linked crypto thefts in April, including the $293 million Kelp DAO exploit on Saturday involving a single point-of-trust failure in cross-chain messaging protocol LayerZero’s infrastructure, and the $280 million exploit of the Drift Protocol.

Another DPRK-linked attack involved the use of AI for social engineering. Crypto wallet Zerion revealed on April 15 that North Korean-affiliated hackers used AI in a long-term social engineering attack to steal about $100,000 from the company’s hot wallets.

Newson warned that, in “some aspects,” the acceleration of AI will only worsen crypto attacks.

 “The best way for investors to protect themselves is to be aware of the current threats they may face… For instance, to protect yourself against phishing, always verify the authenticity of URLs and smart contracts,” Newson said.

Newson said that as exploits become more sophisticated, retail investors should explore storage options outside of crypto exchanges. 

“Using cold wallets can help keep assets that you don’t use regularly safe and allows you to sign transactions without ever exposing your private keys,” she said. 

AI could be used to defend against attacks

“There are now more convincing deepfakes, autonomous attack agents, and ‘agentic AI’ that can autonomously scan smart contracts for bugs, draft exploit code and execute attacks at machine speed,” she said.

On April 6, Cointelegraph reported that a threat actor known as “Jinkusu” was allegedly selling cybercrime tools designed to bypass Know Your Customer (KYC) checks at banks and crypto platforms, using deepfakes and voice manipulation.

“At the same time, AI can also be one of the biggest defenses,” said Newson. 

Cointelegraph recently reported that an increase in AI use has led to a flood of bug bounty submissions, both valid and invalid. Anthropic’s AI model Claude Mythos, claimed to have the ability to find vulnerabilities in major operating systems, has been deployed defensively with a release to a limited set of tech firms.

Regulators are escalating in response

CertiK shared with Cointelegraph in December 2025 that crypto hackers stole $3.3 billion in 2025. 

The company said supply-chain breaches emerged as the most damaging threat, accounting for $1.45 billion in losses across just two incidents, including the $1.4 billion Bybit hack in February 2025.

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“The Bybit exploit signals that well-capitalized, well-coordinated threat actors are becoming more active across the ecosystem,” the report said, predicting a rise in the “sophistication” of supply chain attacks as attackers target more infrastructure providers.

Regulators are responding. On April 9, the US Department of the Treasury’s Office of Cybersecurity and Critical Infrastructure Protection (OCCIP) announced on Thursday that it is expanding its cybersecurity threat identification program to include digital asset companies.

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