Cardano Developer Requests Reduced Funding of $46.8 Million to Enhance Scalability and Bitcoin DeFi

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantial reduction in funding from the project's community treasury, marking a shift in its approach to financial support. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. These proposals focus on scaling Cardano to increase its transaction capacity and expanding its presence in Bitcoin DeFi. Cardano, like other major blockchains, has a shared fund that is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of this funding due to its significant role in developing the underlying software. However, the company now aims to reduce its reliance on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller teams to take over most of its in-house work, including firms like VacuumLabs and Midgard Labs that specialize in specific layers of the Cardano software. The proposals are grouped into two main themes: scaling and Bitcoin DeFi. The first theme involves a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing it to compete with other fast 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 theme involves 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 targeted for public release 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, ensuring that funds are released in stages as different parts of the project are completed. Voting on these proposals opens this week and will run through May 24, with decisions made by approximately 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. Meanwhile, Input Output has cited 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.