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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a significantly reduced amount of funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. Several of these proposals focus on improving Cardano's scalability and expanding its presence in Bitcoin DeFi. Cardano, like other major blockchains, has a shared pool of funds that 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 underlying software. However, the company now aims to reduce its dependence 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, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The nine proposals can be grouped into two main themes: scaling and Bitcoin DeFi. The largest proposal funds a consensus upgrade called Leios, 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 make Cardano competitive with other fast blockchain networks like Solana and Ethereum layer-2. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal funds a system called Pogun, which aims to bring 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 in the second quarter. Other proposals cover 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 releasing the funds upfront. Voting on these proposals began on Tuesday and will run through May 24, with decisions made by roughly 1,000 elected delegates representing 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, Input Output'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 the core Cardano software, providing alternatives to Input Output. Input Output also highlighted progress in the Cardano ecosystem, including the launch of a new 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.