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 a substantially lower amount of funding from the community treasury this year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a notable reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity, as well as expanding its presence in the Bitcoin DeFi space. Cardano, similar to other major blockchains, has a shared pool of funds generated from 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 reduced funding request is part of a plan to gradually decrease the company's reliance on community funds, with the goal of becoming self-sustaining through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current in-house work, including companies like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals can be broadly categorized into two themes: scaling and Bitcoin DeFi. A key proposal is the development of Leios, a consensus upgrade that aims to significantly increase Cardano's transaction processing capacity, potentially reaching over 1,000 transactions per second. This would position Cardano as a competitive player in the market, alongside Solana and the fastest Ethereum layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another significant proposal is the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano. This would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to rely on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals focus on enhancing the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to the achievement of milestones, rather than releasing funds upfront. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output as 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. These changes mean that alternatives to Input Output now exist, which may influence the voting outcome. Additionally, Input Output 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.