Cardano Developer Submits $46.8 Million Funding Proposal for Scalability and Bitcoin DeFi Expansion

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a significantly reduced funding allocation from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for the 2026 voting cycle, a substantial decrease from the $97.5 million requested in 2025. These proposals prioritize scaling solutions to enhance Cardano's transaction processing capacity, as well as expansion into Bitcoin DeFi. The Cardano network, like many other major blockchains, has a shared fund that is fueled by network fees, which are 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 reliance on community funding by decreasing its annual requests, with the goal of becoming self-sustainable through its own revenue. This reduction in funding request is the first step towards this goal, with the company planning to shrink its annual ask until it can operate independently, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output anticipates that smaller, specialized teams will take over a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The submitted proposals can be grouped into two main themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated to a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. The second major proposal focuses on a system called Pogun, designed to integrate Bitcoin-based decentralized finance into the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano, without the need for a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Additionally, 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, ensuring a staged release of funds based on the completion of project components. The voting process, which opened on Tuesday and will run through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will be a significant test of Cardano's governance, particularly in how it treats Input Output's funding requests. Last year's $97.5 million proposal was approved, but the governance landscape has since evolved, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, 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, rising from $137.5 million to $142.7 million. The outcome of the vote will signal the Cardano community's stance on Input Output's reduced funding request and its vision for the project's future development.