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

Input Output, the private company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury compared to the previous year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a notable decrease from the $97.5 million requested in 2025. Several of these proposals are focused on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a shared fund fueled by network fees, which is allocated towards development work through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying software. The reduced funding request is part of a broader plan to gradually 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 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 proposals submitted by Input Output can be categorized into two primary themes. The first involves a consensus upgrade known as Leios, which is expected to significantly increase Cardano's transaction processing capacity, potentially 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 focuses on a system called Pogun, designed to integrate Bitcoin-based decentralized finance into the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without the need for a centralized intermediary. Pogun's lending component is slated for public release in the second quarter. Additional proposals cover 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 delivery milestones, rather than providing upfront funding. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than releasing the full budget at the outset. Voting on these proposals is scheduled to begin and will continue 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 be a significant test of Cardano's governance model, which has undergone significant expansion over the past two years, and will indicate whether Input Output is treated as any other grant applicant or if its requests continue to be approved based on its historical role in the project. The previous 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, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. Additionally, total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the proposals are fully funded, partially funded, or significantly altered by the DReps, will signal a shift in the Cardano community's approach to development funding, now that mechanisms to support development without relying on Input Output are in place.