Cardano Developer Seeks Reduced Funding for Expansion and DeFi Integration

Input Output, the company responsible for developing the Cardano blockchain, is requesting approximately half the funding it sought in the previous year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, with a focus on scaling the Cardano network and expanding its capabilities in the Bitcoin DeFi space. This reduced funding request marks the first step in a plan to reduce 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 most of the work currently handled in-house, including firms such as VacuumLabs and Midgard Labs. The proposals are divided into two main themes: scaling and Bitcoin DeFi. The largest proposal funds the development of Leios, a consensus upgrade that aims to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. Another key proposal funds Pogun, a system designed 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. Smaller proposals focus on performance improvements 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. 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 test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. The Cardano community's decision will signal how much its thinking has shifted now that alternatives to Input Output exist, and the tools to fund development without the company are available.