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

Input Output, the primary engineering company responsible for the development of the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This represents a substantial decrease from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. Cardano's community treasury, which is funded by network fees, is allocated through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company 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 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. The most significant 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 would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Leios 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 integrate Bitcoin-based decentralized finance into Cardano. This would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. 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. Voting on the proposals opens on Tuesday and runs through May 24, with decisions made 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. 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. These shifts mean 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 reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano rose 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 alternatives to Input Output exist.