Cardano Developer Seeks Reduced Funding of $46.8 Million for Expansion and DeFi Integration

Input Output, the company responsible for developing 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 amounting to $46.8 million for 2026, down from $97.5 million in 2025. Several of these proposals focus on enhancing Cardano's scalability to boost its transaction processing capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, maintains a communal fund fueled by network fees, which community representatives vote to allocate towards development projects. Input Output has historically been the largest recipient of these funds due to its significant role in building the underlying software. However, the company now aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects smaller, specialized teams, such as VacuumLabs and Midgard Labs, to take on a significant portion of the work currently handled in-house. The nine proposals can be grouped into two primary 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 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 bring Bitcoin-based decentralized finance to 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. Smaller proposals cover 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 rather than releasing funds upfront. Voting on these proposals is set to begin and will run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. 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 deference. The Cardano community's willingness to adapt and support alternative development paths will be put to the test. Meanwhile, Input Output has also highlighted progress within 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.