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 substantial reduction in funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease of over 50% from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, like other major blockchains, has a community-managed fund that allocates resources for development work. Historically, Input Output has been the primary recipient of these funds due to its significant role in building the underlying software. However, the company now aims to reduce its reliance on community funding by gradually decreasing its annual 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 aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. The most significant proposal funds the Leios consensus upgrade, which promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially making it competitive with Solana and the fastest Ethereum layer-2 networks. Additionally, the Pogun system aims to introduce Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Other proposals cover performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal outlines specific delivery milestones and ties funding to these milestones, ensuring a more staged approach to resource allocation. The voting process, which opens on Tuesday and runs through May 24, will be overseen by roughly 1,000 elected delegates representing ADA holders. The outcome of this vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical significance to the project. Meanwhile, Input Output has highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano, rising from $137.5 million to $142.7 million.