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

Input Output, the private company responsible for building and maintaining the Cardano blockchain, is seeking approximately half the funding it requested last year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and expanding into Bitcoin DeFi. Cardano, like other major blockchains, has a shared pool of funds, known as the community treasury, which is allocated by community representatives 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 decreasing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals submitted by Input Output can be grouped into two main themes. 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 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 flagship proposal is for a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without having to give custody to a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. The remaining proposals cover various improvements, including performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal has specific delivery leads and ties funding to delivery milestones rather than releasing the funds upfront. The voting process, which opens on Tuesday and runs through May 24, will be decided by roughly 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 since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization running this vote, has assumed stewardship of core Cardano software. This shift means 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. The total assets deposited on Cardano have also risen 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 there are alternatives to Input Output for funding development.