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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a substantial reduction in funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease of over 50% from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. Cardano, like other major blockchains, has a shared fund that is fueled by network fees, which are allocated towards development work through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in building the underlying software. The reduced funding request is part of a plan to gradually decrease Input Output's reliance on community funds. The company aims to reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering groups. 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 proposals can be grouped into two main themes: scaling and Bitcoin DeFi integration. The largest proposal funds the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting 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 the Pogun system, which aims to bring Bitcoin-based decentralized finance to Cardano. This system would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. The lending component of Pogun 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, rather than releasing funds upfront. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, 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 deference. Last year's $97.5 million proposal was approved, but the Cardano Foundation has since taken over the project's grant-funding arm, and Intersect, the governance organization running this vote, has assumed stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano have also increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's thinking has shifted, now that the tools to fund development without Input Output exist.