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 substantially less funding from the project's community treasury this year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a considerable reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund fueled 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 underlying software. However, the company now aims to gradually reduce its reliance on community funding, with plans to become self-sufficient through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to 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 can be broadly categorized into two themes: scaling and Bitcoin DeFi. A key proposal involves the development of Leios, a consensus upgrade that promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially allowing it to process over 1,000 transactions per second. This would significantly enhance Cardano's competitiveness, placing it on par with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June, with full deployment expected by the end of the year. Another significant proposal is 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 needing to rely on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Other proposals cover various improvements, including 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. Voting on these proposals opens 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 be a test of whether Cardano's governance treats Input Output as any other grant applicant or continues to favor its proposals. Last year, Input Output's $97.5 million proposal was approved, but the landscape has changed with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not previously. 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. Furthermore, total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how the Cardano community's perspective has shifted, especially now that there are tools in place to support development without relying on Input Output.