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 requesting roughly half the funding it sought in the previous year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025, with a focus on scaling the network and expanding into Bitcoin DeFi. Cardano, like other major blockchains, has a shared pool of funds generated by network fees, which are 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 reduce its dependency 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 current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals are grouped into two main themes: scaling and Bitcoin DeFi. The largest proposal funds the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. This would make Cardano competitive with other fast blockchain networks like Solana and Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal supports the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly 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 outlines specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different components of the project are completed. Voting on the proposals will begin on Tuesday and run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. 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 progress in 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 from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted now that there are tools in place to fund development beyond Input Output.