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

Input Output, the company responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of the $97.5 million requested in 2025. The proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. Cardano's community treasury, which is funded by network fees, is the source of the proposed funding. The treasury is managed by community representatives who vote on the allocation of funds for development projects. Input Output has historically been the primary recipient of these funds due to its significant role in building and maintaining the Cardano software. However, the company aims to reduce its dependence on community funding by decreasing its annual funding requests until it can sustain itself through its own revenue. The community funds will then be redirected to support smaller, specialized engineering teams. By the end of 2026, Input Output expects to outsource most of its current in-house work to smaller teams, including VacuumLabs and Midgard Labs, which specialize in specific layers of the Cardano software. The proposed funding is divided into two primary themes: scaling and Bitcoin DeFi. The largest portion of the funds will go towards a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal focuses on a system called Pogun, which aims to integrate Bitcoin-based decentralized finance into Cardano. This will enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. The lending component of Pogun is expected to be released to the public in the second quarter. Smaller proposals cover various improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, rather than releasing the funds upfront. The voting process, which begins on Tuesday and runs through May 24, will be carried out by approximately 1,000 elected delegates known as DReps, who represent ADA holders. 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 its historical role in the project. Last year's $97.5 million proposal was approved, but the Cardano Foundation has since taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software. These changes have created alternatives to Input Output, which may impact the outcome of the vote. 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. The total assets deposited on Cardano have also increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how the Cardano community's perspective has shifted, now that there are alternatives to Input Output for funding development projects.