Cardano Developer Seeks 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 substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, operates a communal fund fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the primary 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, with plans to decrease its annual requests until it can sustain itself through its own revenue. This shift will enable community funds to support a more diverse range of engineering groups. By the end of 2026, Input Output anticipates that smaller, specialized teams will take over a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. A key proposal is the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal is the Pogun system, designed to introduce Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Additional proposals cover 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 a staged release of funds based on progress. Voting on these proposals will commence on Tuesday and conclude on May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output as any other grant applicant or continues to approve its requests based on historical deference. The Cardano Foundation's takeover of the project's grant-funding arm and Intersect's stewardship of core Cardano software have introduced alternatives to Input Output, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.