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

Input Output, the company responsible for developing the Cardano blockchain, is seeking approximately half the funding it requested in the previous year from the project's treasury. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a substantial reduction from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, like other major blockchains, maintains a shared fund generated from 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 employing engineers who develop the underlying software. However, the reduced funding request is part of a plan to gradually decrease dependence on community funds, aiming for Input Output to become self-sustaining through its own revenue. By the end of 2026, the company expects smaller, specialized teams to take over most of its in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are grouped into two main themes: scaling and Bitcoin DeFi integration. A key proposal, Leios, aims to significantly increase Cardano's transaction processing capacity, potentially making it competitive with 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. Another significant proposal, Pogun, seeks to introduce Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals address 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, adopting a staged payment approach similar to paying a contractor for completed parts of a project rather than upfront. Voting, which will determine the allocation of funds, begins on Tuesday and concludes on May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome will indicate whether Cardano's governance treats Input Output differently now that alternatives exist for grant funding and core software development. Meanwhile, Input Output highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation shortly after its launch, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million.