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 requesting approximately half the funding it sought last year from the project's treasury. The firm has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025. These proposals focus on scaling Cardano to enhance its transaction processing capacity and expanding into Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund pool generated by network fees that community representatives vote to allocate for development purposes. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying software. However, the company now aims to reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take over most of its in-house work, focusing on specific layers of the Cardano software. The nine proposals can be grouped into two main themes. The first involves a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This upgrade would significantly improve Cardano's competitiveness with other fast Ethereum layer-2 networks and Solana in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second proposal funds a system called Pogun, aimed at bringing Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without needing a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover 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 delivery milestones rather than releasing funds upfront. The voting process, which opens on Tuesday and runs through May 24, will be decided by roughly 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will determine whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on 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 alternatives to Input Output now exist, which may impact the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks. Total assets deposited on Cardano rose from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's perspective has shifted now that tools to fund development without Input Output are available.