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 a substantially lower amount of funding from the project's treasury this year. 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 to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, like other major blockchains, has a communal fund fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the reduced funding request marks the beginning of a plan to decrease Input Output's dependency on community funds. The company aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. The most significant proposal funds the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. The second major proposal supports the development of Pogun, a system designed to bring 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. The lending component of Pogun is targeted for public release in the second quarter. Other proposals address 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 that funds are released in stages as different components are completed. Voting on the proposals begins on Tuesday and will run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. These delegates represent ADA holders and will determine the fate of Input Output's funding requests. The outcome of the vote will indicate 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 significant changes have taken place since then, including the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. 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. Total assets deposited on Cardano have risen from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how the Cardano community's perspective has shifted now that alternatives to Input Output exist.