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 smaller portion of the project's community treasury funding, marking a significant shift in its approach. The firm has submitted nine proposals for 2026, amounting to $46.8 million, which is roughly half of the $97.5 million it requested in 2025. These proposals primarily focus on enhancing Cardano's scalability to boost transaction processing capacity and venturing into Bitcoin DeFi. Cardano, similar to other major blockchains, is supported by a communal fund fueled by network fees, which are 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 blockchain's underlying software. This reduced funding request is part of a broader plan to gradually decrease Input Output's dependency on community funds. The company aims to reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller, specialized engineering teams. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will take over most of the in-house work, including specific layers of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. A significant portion of the funds will support the development of Leios, a consensus upgrade that Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is scheduled for a test release in June and is expected to be fully deployed by the end of the year. The second key proposal focuses on Pogun, a system designed to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system will enable bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Other proposals cover various aspects, including 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, ensuring a staged release of funds based on the completion of specific project components. The voting process, which opened on Tuesday and will run through May 24, will be decided 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, directly addressing these delegates to make the case for the proposals. The outcome of the vote will be a crucial test of Cardano's governance, which has undergone significant expansion over the past two years. It will determine whether Input Output is treated like any other grant applicant or if its requests continue to be approved largely out of deference. Last year, Input Output'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, which could influence the voting outcome. Input Output also highlighted the progress made in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation within weeks of its launch. Additionally, the total assets deposited on Cardano have increased from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the full slate is approved, partially funded, or reshaped, will signal how the Cardano community's perspective has shifted, now that there are tools in place to support development without relying on Input Output.