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 approximately half of the funding it sought in the previous year from the project's treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a substantial reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, relies on a communal fund fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the underlying software. However, the reduced funding request signifies the first step towards reducing this dependency. Input Output aims to gradually decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams, such as VacuumLabs and Midgard Labs, will assume most of the in-house work, focusing on specific layers of the Cardano software. The nine proposals are categorized into two main themes. The primary funding allocation is for a consensus upgrade called Leios, which Input Output claims will enhance 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 chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second prominent proposal funds a system called Pogun, designed to integrate Bitcoin-based decentralized finance into Cardano. This system would enable 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 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 delivery milestones, rather than releasing funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting commenced on Tuesday and will continue through May 24, with decisions made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. The founder of Input Output, Charles Hoskinson, is scheduled to release a video this week, directly addressing these delegates. The outcome of the vote will determine 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 since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization overseeing this vote, has assumed responsibility for the core Cardano software. These changes mean that alternatives to Input Output now exist, which was not the case in previous votes. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano, a common measure of a network's usage, increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal the shift in the Cardano community's perspective, now that the tools to fund development without Input Output are available.