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, marking a notable reduction from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a communal fund that is fueled by network fees and 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. The decrease in funding requested is part of a broader plan to reduce Input Output's reliance on community funds. The company aims to gradually decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller engineering teams. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current in-house work. This includes firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are centered around two main themes: scaling and Bitcoin DeFi. A key proposal is the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially reaching over 1,000 transactions per second. This would position Cardano as a competitive force alongside Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Leios upgrade is scheduled for a test release in June, with full deployment expected by the end of the year. Another significant proposal is for a system called Pogun, designed to integrate Bitcoin-based decentralized finance into Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to rely on a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals include performance enhancements for Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal outlines specific delivery leads and ties funding to the achievement of delivery milestones, rather than providing upfront funding. Voting on the proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is expected to release a video this week, directly addressing the delegates and making the case for the proposals. The outcome of the vote will be a test of Cardano's governance, which has undergone significant expansion over the past two years. It will determine whether Input Output is treated like any other grant applicant or if its requests continue to be approved based on its historical role in the project. Last year's $97.5 million proposal was approved, but the landscape has changed with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These shifts mean that alternatives to Input Output now exist, potentially altering how the community approaches funding decisions. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks. Total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period, indicating growing network usage. The outcome of the vote, whether the proposals are fully approved, partially funded, or significantly altered, will signal a shift in the Cardano community's approach to development funding, now that mechanisms exist to support development beyond Input Output.