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

Input Output, the private company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a considerable reduction from its $97.5 million request in 2025. 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 communal fund supported by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the primary recipient of this funding due to its significant role in developing the blockchain's underlying software. This reduced funding request is the first step in a plan to decrease Input Output's dependence on community funds. The company aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider 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 collaborations with firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are centered around two main themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated to a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, with a target of 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 key proposal involves a system called Pogun, designed to introduce Bitcoin-based decentralized finance to Cardano. This system will enable bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. The lending component of Pogun is planned for public release in the second quarter. Smaller 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 milestones rather than providing upfront payments. 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. Charles Hoskinson, the founder of Input Output, is expected to release a video this week to directly address these delegates. The outcome of this vote will test whether Cardano's governance treats Input Output like any other grant applicant or if it continues to approve its requests based on historical 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 the core Cardano software, providing alternatives to Input Output that did not exist during previous votes. 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. 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, now that there are tools in place to support development without relying solely on Input Output.