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, is seeking a substantially lower amount of funding from the project's treasury for 2026. The company has submitted nine proposals amounting to $46.8 million, which marks a decrease from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, operates a communal fund that is fueled by network fees, and community representatives vote to allocate these funds towards development projects. Historically, Input Output has been the primary recipient of these funds due to its significant role in employing engineers who work on the underlying software. However, the reduced funding request is part of a broader plan to reduce Input Output's dependency on community funds. The company aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a more diverse range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams will assume most of the responsibilities currently handled in-house, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The nine proposals can be grouped into two primary themes: scaling and Bitcoin DeFi. The most substantial proposal supports a consensus upgrade known as Leios, which Input Output claims will enhance Cardano's transaction processing capacity by 10 to 65 times, with a target of over 1,000 transactions per second. This upgrade would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. The second key proposal involves a system called Pogun, designed 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 a centralized intermediary. Pogun's lending component is slated for public release in the second quarter. Other proposals address performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal specifies delivery leads and ties funding to specific milestones rather than providing upfront funding. Voting on these proposals commenced on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or continues to approve its requests based on historical 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 has assumed stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, which could influence the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The result of the vote will signal how the Cardano community's perspective has shifted, given the availability of tools to fund development independently of Input Output.