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

Input Output, the company responsible for developing the Cardano blockchain, has submitted nine proposals for the 2026 funding cycle, totaling $46.8 million, which marks a substantial reduction from its $97.5 million request in 2025. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a community treasury that is funded by network fees and allocated 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 dependency on community funds by gradually decreasing its annual funding requests until it can sustain itself through its own revenue. This reduction in funding requests is the first step towards this goal. 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 layers 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 upgrade 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 a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components are completed. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates 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 its historical role in the project. Meanwhile, Input Output has also highlighted progress within 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.