Cardano Developer Seeks Reduced Funding of $46.8 Million for Expansion and Bitcoin 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 treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease of over 50% from the $97.5 million requested in 2025. The proposals primarily focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano's community treasury, which is funded by network fees, is allocated 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 aims to reduce its reliance on community funding and become self-sufficient through its own revenue streams. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are divided into two main themes: scaling and Bitcoin DeFi integration. The largest proposal funds the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This upgrade would position Cardano as a competitive player in the blockchain space, alongside Solana and the fastest Ethereum layer-2 networks. The Leios upgrade is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal focuses on Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano. This system would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Other proposals cover performance 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. The voting process, which opens on Tuesday and runs through May 24, will be overseen by roughly 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 significant changes have taken place since then, including the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These shifts have created alternatives to Input Output, which may influence the voting outcome. 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.