Cardano Developer Seeks 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 last year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a reduction from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring Bitcoin DeFi opportunities. The Cardano network, similar to other major blockchains, has a communal fund supported by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to undertake most of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The submitted proposals are categorized into two primary themes: scaling and Bitcoin DeFi integration. A key proposal involves the development of Leios, a consensus upgrade that Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially reaching over 1,000 transactions per second. This would position Cardano as a competitive network alongside Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June and full deployment by the end of the year. Another significant proposal is the development of Pogun, a system designed to integrate Bitcoin-based decentralized finance into Cardano. This system 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 targeted for public release in the second quarter. Smaller proposals cover improvements 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 delivery milestones, adopting a pay-as-you-go approach rather than releasing funds upfront. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output as 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 the core Cardano software, providing alternatives to Input Output. 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 outcome of the vote will signal the shift in the Cardano community's perspective on funding development, now that alternatives to Input Output exist.