The Cardano blockchain is set for a new phase of technical advancement following community approval of a $71 million development fund. The allocation—equivalent to 96 million ADA or roughly 13% of the network’s treasury—will go to Cardano’s core engineering team, Input Output Global (IOG), to support 12 months of planned upgrades and infrastructure enhancements.
The proposal passed with 74% of participating votes in favor, marking a significant commitment by the community to accelerate the ecosystem’s progress. Payments will be made based on deliverable milestones and will be monitored by Intersect, Cardano’s independent governance body. In addition to oversight from Intersect, the process will include smart contract-based tracking and input from an external committee to enhance transparency and accountability.
Upgrades and ecosystem momentum
Key technical deliverables under the plan include Hydra, Cardano’s layer-2 scaling protocol designed to offer faster and cheaper transactions, and Project Acropolis, a re-architecture of the Cardano node aimed at modularizing the system and reducing onboarding friction for developers. IOG also plans to reduce memory usage and improve validator performance to drive cost-efficiency at the infrastructure level.
These developments are expected to significantly boost developer activity and expand use cases across the Cardano network, ultimately contributing to increased demand for ADA, the protocol’s native gas token. Enhanced scalability and usability could position Cardano more competitively alongside other smart contract chains.
The approval came after months of discussion and some controversy. Critics raised concerns over the proposal’s lack of budget detail and argued that the allocation should have been split into smaller, voteable packages. A competing proposal from Cardano’s Technical Steering Committee, which initially gained support, was ultimately voted down.
Meanwhile, rival blockchains are continuing to move forward with their own technical upgrades. Solana recently raised its compute unit ceiling by 20%, and Ethereum’s Pectra upgrade increased both its blob limit and staking cap. Another major fork for Ethereum, Fusaka, is scheduled for late 2025, adding pressure on Cardano to deliver on its roadmap.