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

Input Output, the engineering firm 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, marking a notable reduction from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, relies on a community-managed treasury, which is funded 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 underlying software. However, the company is now working to reduce its reliance on community funding, with the goal of becoming self-sustaining through its own revenue. This reduced funding request is the first step in this plan, aiming to gradually decrease the annual allocation until community funds can be redirected 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 aspects of the Cardano software. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. The most substantial proposal supports the development of Leios, a consensus upgrade designed to significantly enhance Cardano's transaction processing capacity, potentially increasing it by 10 to 65 times. This upgrade aims to position Cardano as a competitive player in the market, with a target of over 1,000 transactions per second, rivaling the performance of Solana and the fastest Ethereum layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another key proposal focuses on Pogun, a system intended to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their holdings directly through Cardano, without the need for a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Additional proposals address 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 defined milestones, rather than releasing funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting on these proposals will commence on Tuesday and conclude on May 24, with decisions made 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, which has undergone substantial expansion over the past two years, and will indicate whether the community treats Input Output as any other grant applicant or continues to approve its requests based on historical deference. The Cardano Foundation has recently taken over the project's grant-funding arm, and Intersect, the governance organization overseeing this vote, has assumed stewardship of core Cardano software, introducing alternatives to Input Output that did not exist during previous voting cycles. 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 from $137.5 million to $142.7 million. The outcome of the vote will signal the shift in the Cardano community's perspective, now that alternatives to Input Output exist for funding development.