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 a substantial reduction in funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund that is fueled by network fees, which community representatives vote to allocate for development purposes. Historically, Input Output has been the primary 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 dependence on community funding by decreasing its annual 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 anticipates that smaller, specialized teams will 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 nine proposals can be grouped into two main themes. The first theme involves a consensus upgrade called Leios, which Input Output claims will significantly increase Cardano's transaction processing capacity, potentially reaching over 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal involves a system called Pogun, designed to integrate Bitcoin-based decentralized finance into Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other 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, rather than releasing funds upfront. Voting on these proposals begins 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 the vote will test 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, providing alternatives to Input Output that did not exist during previous votes. 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, 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 much the Cardano community's perspective has shifted, now that there are tools in place to fund development without relying on Input Output.