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

Input Output, the company responsible for developing the Cardano blockchain, is seeking to reduce its funding from the project's community treasury. The firm has submitted nine proposals for 2026, amounting to $46.8 million, which marks a substantial decrease from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability to increase transaction processing capacity and exploring Bitcoin DeFi opportunities. Cardano, like other major blockchains, maintains a shared fund that is allocated by community representatives through a voting process. Historically, Input Output has been the primary 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 funding by decreasing its annual requests until it can sustain itself through its own revenue, allowing smaller engineering groups to take on more development work. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to assume most of its current responsibilities. The submitted proposals are grouped into two main themes: scaling and Bitcoin DeFi. The Leios consensus upgrade aims to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Leios upgrade is scheduled for a test release in June and full deployment by the end of the year. Another key proposal funds the Pogun system, which seeks to introduce Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Smaller proposals address performance 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 deference. Last year'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 core Cardano software, providing alternatives to Input Output. 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. The outcome of the vote will signal the shift in the Cardano community's perspective on funding development, now that alternatives to Input Output exist.