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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking approximately half of the funding it requested last year from the project's treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. These proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. Cardano, like other major blockchains, has a community-funded treasury that is allocated through a voting process. Input Output has historically been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company now aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals are grouped into two main themes: scaling and Bitcoin DeFi. The largest proposal funds the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. This would position Cardano as a competitive player in the blockchain space, alongside Solana and Ethereum layer-2 networks. The Leios upgrade is scheduled for a test release in June and full deployment by the end of the year. The second major proposal funds the Pogun system, which aims to introduce Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, rather than providing upfront funding. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will test 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's $97.5 million proposal was approved, but the Cardano Foundation has since taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. Input Output also highlighted progress 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.