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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a reduced amount of funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, which is roughly half of the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury is a shared pool of funds generated from network fees, which are allocated towards development work through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in building the underlying software. However, the company aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. 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 categorized into two main themes: scaling and Bitcoin DeFi. The first theme includes a consensus upgrade called Leios, which is expected to 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 theme involves a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is expected to be released 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 is tied to specific delivery milestones, ensuring that funding is released in stages as different parts of the project are completed. 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 test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. Meanwhile, Input Output has reported 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.