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

The company behind the Cardano blockchain, Input Output, is seeking a substantially lower amount of funding from the project's treasury this year. The firm has submitted nine proposals amounting to $46.8 million for 2026, marking a decrease from the $97.5 million it requested in 2025. These proposals are focused on enhancing Cardano's scalability to boost its transaction processing capacity and exploring the integration of Bitcoin DeFi. Cardano's community treasury is a shared fund that is fueled by network fees, with community representatives voting on how to allocate these funds for development purposes. Historically, Input Output has been the primary recipient of these funds due to its significant role in employing engineers who work on the underlying software. The reduced funding request is part of a broader plan to reduce Input Output's dependency on community funds. The company aims to lower its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams will take on a significant portion of the work currently handled in-house. This includes firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are centered around two main themes: scaling and Bitcoin DeFi. A key proposal is the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times. This would enable Cardano to process over 1,000 transactions per second, making it competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Leios upgrade is scheduled for a test release in June, with full deployment expected by the end of the year. Another significant proposal is for a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to Cardano. This system would allow Bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to transfer custody to a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals cover 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 the achievement of delivery milestones, rather than releasing the funds upfront. Voting on these proposals begins on Tuesday and will run through May 24. The decisions will be made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week to make the case directly to these delegates. The outcome of the vote will be a test of 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. 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 has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not during previous votes. Input Output also highlighted progress in the Cardano ecosystem, including the launch of a new stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano, a measure of the network's usage, increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's perspective has shifted, given the existence of tools to fund development without relying on Input Output.