Cardano Developer Seeks Reduced Funding of $46.8 Million for Expansion and Bitcoin DeFi Integration

Input Output, the private company responsible for developing the Cardano blockchain, is seeking a substantially reduced amount of funding from the community treasury, marking a shift towards greater financial independence. The company has submitted nine proposals totaling $46.8 million for the 2026 funding cycle, which is roughly half of the $97.5 million requested in the previous year. These proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund that is fueled by network fees, and community representatives vote on how to allocate these funds for development purposes. Historically, Input Output has been the largest recipient of these funds due to its significant role in building and maintaining the underlying software. However, the company now aims to gradually reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals can be grouped into two main themes: scaling and Bitcoin DeFi integration. One of the key proposals involves funding for a consensus upgrade called Leios, which is designed to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other fast blockchain networks like Solana and Ethereum layer-2 networks. Leios is slated for a test release in June and is expected to be fully deployed by the end of the year. Another significant proposal is for a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their bitcoin holdings through Cardano without needing to rely on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover various improvements such as enhancing the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to the achievement of delivery milestones, rather than providing the funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed. The voting process, which is open to roughly 1,000 elected delegates known as DReps who represent ADA holders, will run until May 24. The outcome of this vote will be a test of whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. Last year, Input Output's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software, providing alternatives to Input Output that did not exist previously. Input Output has also highlighted the progress made in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, especially now that there are tools in place to fund development without relying solely on Input Output.