Input Output (IO) reported meaningful progress on most treasury-funded Cardano projects across Q4 2025 and Q1 2026, presenting the period as a real-world test of whether ecosystem funding yields publicly verifiable delivery. In its delivery report IO said 16 of 18 commitments advanced; two — Acropolis and a tiered pricing initiative — were canceled and their funds returned to the treasury.
“Every outcome in this report is publicly verifiable,” IO emphasized, framing the treasury model bluntly: either funding produces trackable output or it goes back.
Key adoption wins: USDCx launches and TVL uptick
- USDCx went live on Cardano in Q1 2026, 84 days after IO’s announcement. More than 15 million USDCx were minted in the first week.
- Cardano DeFi total value locked (TVL) rose from $127 million to $142 million during that period, with Minswap, Liqwid and SundaeSwap supporting live liquidity pools around the new asset.
Interoperability: LayerZero and Midnight
- IO highlighted LayerZero’s integration with Cardano and Midnight as “the single largest interoperability unlock in the ecosystem’s history.” The integration connects Cardano to over 160 blockchains and more than $80 billion in omnichain assets, the report said, and is especially relevant given Midnight’s selective disclosure and zero-knowledge proof architecture.
Broader ecosystem milestones
The report also cataloged external signs of momentum for Cardano:
- CME Group launched Cardano futures in February.
- Coinbase added ADA as collateral for on-chain loans.
- Midnight’s mainnet launched.
- ADA began to be accepted at 137 SPAR stores in Switzerland.
Engineering and infrastructure updates
IO’s engineering summary focused on node reliability, security and upgrade readiness:
- Cardano node releases 10.5.4 and 10.6.2 shipped with improvements to network connectivity, system monitoring, and preparatory support for future protocol versions (v11 and v12).
- The KES agent reached version 1.0. By isolating cryptographic key management from the main node process, the tool reduces key-related attack surface for stake pool operators — important for Cardano’s more than 3,000 stake pools.
- UTXO HD moved the UTXO set from memory to disk, cutting node memory utilization by up to 80%, which can lower infrastructure costs and make running nodes less resource-intensive.
Scaling as a three-track program
IO reiterated that scaling is being pursued on multiple fronts rather than as a single upgrade:
- Mithril hit its first stable release. Distribution 2603.1 added support for the decentralized message queue protocol, a step toward operating without a central coordinator. Future builds are earmarked (Mithril 2608 is listed among Q2 targets).
- Hydra progressed through releases 1.0.0 to 1.3.0, with practical improvements such as faster node restarts, chain-sync drift reporting, deposit and decommit fixes, and active testing with real users. The report noted Pondora’s Echo as the first non-custodial Hydra implementation and called out the VTech Hydra SDK.
- Leios, Cardano’s base-layer throughput upgrade, produced a working prototype that can produce and distribute endorser blocks in a local multi-node network, including large blocks of hundreds of transactions and optional simulated network delays.
Developer tooling, formal methods and research
- Plutus improvements included Van Rossem hard fork features, faster Flat decoding, optimized bytestring–integer primitives, and improved Plinth tooling.
- Cardano High Assurance opened early access to five companies trialing automated formal verification at the UPLC level.
- Research stayed active: Work Package 25 closed with all funding milestones complete after a public consultation that engaged more than 24,000 people. Two papers from the project were published at Financial Cryptography 2026, and IO chief scientist Professor Aggelos Kiayias was named an ACM Fellow.
What’s next
IO listed several Q2 priorities: an intra-era protocol 11 hard fork coordinated by Intersect, node v10.7, Mithril 2608, a Leios public testnet, Work Package 26, and the Cryptographic Tools for the Blockchain workshop at Eurocrypt 2026.
Market snapshot
At the time of the report, ADA traded at $0.2491.
Bottom line
IO’s delivery report presents a narrative of measurable progress across infrastructure, interoperability and developer tooling, while underscoring a treasury accountability model that returns funds when projects don’t deliver. The combination of USDCx adoption, LayerZero integration, node and scaling work, plus external market signals (CME futures, Coinbase collateral, Midnight mainnet) gives Cardano a string of verifiable milestones heading into Q2.
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