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

The company behind the Cardano blockchain, Input Output, is requesting a substantially lower amount of funding from the community treasury this year. The submitted proposals, totaling $46.8 million, mark a reduction of nearly half from the $97.5 million requested in 2025. This decrease in funding is part of a broader plan to reduce the company's reliance on community funds, with the goal of becoming self-sufficient through its own revenue streams. Several of the proposals focus on enhancing the scalability of the Cardano network, aiming to increase its transaction processing capacity, as well as expanding into the realm of Bitcoin decentralized finance (DeFi). The Cardano network, similar to other major blockchains, operates a communal treasury that is funded by network fees, with allocations determined by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in the development and maintenance of the underlying software. The reduction in funding requested by Input Output is the first tangible step towards minimizing its dependency on community funds. The company's objective is to gradually decrease its annual funding requests until it can operate independently, with community funds being redirected towards supporting a more diverse range of smaller, specialized engineering groups. By the end of 2026, Input Output anticipates that smaller, more specialized teams will assume the majority of the development work currently handled in-house. This includes firms such as VacuumLabs and Midgard Labs, which focus on specific layers of the Cardano software. The submitted proposals can be categorized into two primary themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated towards a consensus upgrade known as Leios, which Input Output claims will enhance Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. For context, this upgrade would position Cardano as a competitive force alongside Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Leios upgrade is slated for a test release in June, with full deployment expected by the end of the year. The second major proposal is dedicated to the development of a system called Pogun, designed to integrate Bitcoin-based DeFi into the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano, all without the need for a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals encompass performance enhancements 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 the achievement of predefined milestones, rather than releasing funds upfront. Voting on these proposals commenced on Tuesday and will continue through May 24, with decisions being made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is scheduled to release a video addressing these delegates directly. The outcome of this vote will serve as a test for Cardano's governance, which has undergone significant expansion over the past two years. It will determine whether Input Output is treated as any other grant applicant or if its requests continue to be approved largely out of deference. Last year's proposal of $97.5 million was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization overseeing this vote, has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not during previous votes. Input Output also highlighted progress within the ecosystem, noting that a new Cardano stablecoin, USDCx, has reached 14.6 million tokens in circulation within weeks of its launch. Additionally, total assets deposited on Cardano have increased from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the full slate is approved, partially funded, or entirely reshaped by DReps, will signal the extent to which the Cardano community's perspective has shifted, given the existence of tools to fund development independently of Input Output.