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

Input Output, the company responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of the $97.5 million requested in the previous year. The proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. The Cardano network relies on a community-managed treasury, funded by network fees, which is allocated through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company aims to reduce its dependency on community funding by gradually 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 most of its current in-house work. The submitted proposals are divided into two main categories: scaling and Bitcoin DeFi. One of the key proposals, Leios, aims to increase Cardano's transaction processing capacity by 10 to 65 times, enabling the network to process over 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal, Pogun, focuses on introducing Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to lend and earn yield on their holdings without relying on centralized intermediaries. The Pogun lending component is expected to be released publicly in the second quarter. The remaining proposals cover various aspects, including performance enhancements 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, ensuring a staged release of funds. Voting on these proposals will take place from Tuesday until May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output as any other grant applicant or continues to approve its requests based on historical deference. Last year's $97.5 million proposal was approved, but the governance landscape has changed since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These shifts have created alternatives to Input Output, which may influence the voting outcome. Input Output has 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.