Cardano Developer Requests 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 substantially lower amount of funding from the project's treasury this year. The firm has submitted nine proposals totaling $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a community-managed treasury that allocates funds for development work based on voting by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company aims to reduce its reliance on community funding by gradually decreasing its annual requests until it can sustain itself through its own revenue. This reduction is part of a broader plan to diversify the development work among smaller, specialized teams. By the end of 2026, Input Output anticipates that external firms, such as VacuumLabs and Midgard Labs, will take over a significant portion of its current in-house work. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi. A key proposal, Leios, promises to significantly enhance Cardano's transaction processing capacity, potentially increasing it by 10 to 65 times, which would position Cardano competitively alongside other fast layer-2 networks. Leios is slated for a test release in June and full deployment by the end of the year. Another significant proposal, Pogun, aims to integrate Bitcoin-based decentralized finance into Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. The remaining proposals cover various improvements, including enhancements to Cardano's smart contract engine, security testing, developer tools, and expanded API services. Each proposal outlines specific delivery milestones and ties funding to these milestones, ensuring a staged release of funds based on progress. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates representing ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output differently now that alternative development paths and grant-funding mechanisms are in place. Last year, Input Output's $97.5 million proposal was approved, but the governance landscape has since evolved, with the Cardano Foundation taking over grant funding and Intersect assuming stewardship of core software. These changes introduce alternatives to Input Output, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new stablecoin, USDCx, which has seen 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano, rising from $137.5 million to $142.7 million. The voting results will reflect the Cardano community's perspective on development funding and its willingness to support Input Output's proposals amidst these changes.