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

Input Output, the company responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of the $97.5 million requested in 2025. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin-based decentralized finance opportunities. Cardano's community treasury, which is funded by network fees, will be allocated based on votes from community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company now aims to reduce its reliance on community funding by decreasing its annual requests. The goal is for Input Output to become self-sustaining, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take on a significant portion of the work currently handled in-house. The nine proposals can be grouped into two main themes: scaling and Bitcoin DeFi. The most substantial proposal is for a consensus upgrade called Leios, which promises to increase Cardano's transaction processing capacity by 10 to 65 times. This would enable the blockchain to process over 1,000 transactions per second, making it competitive with other major blockchains like Solana and Ethereum. The second key proposal is for a system called Pogun, which aims to integrate Bitcoin-based decentralized finance into Cardano. This would allow bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Other proposals focus on improving the performance of Cardano's smart contract engine, enhancing security testing infrastructure, and expanding API services. Each proposal outlines specific delivery milestones and ties funding to the completion of these milestones. The voting process, which opens on Tuesday and runs through May 24, will be overseen by roughly 1,000 elected delegates representing ADA holders. The outcome of the vote will indicate 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. In the past year, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. Input Output also highlighted the growth of the Cardano ecosystem, including the launch of a new stablecoin, USDCx, which has reached 14.6 million tokens in circulation. The total assets deposited on Cardano have also increased from $137.5 million to $142.7 million. The fate of the proposals will signal how the Cardano community's perspective has shifted, now that there are alternatives to Input Output for funding development.