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

Input Output, the private company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury compared to the previous year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, operates a shared fund fueled by network fees, which is allocated towards development projects through a voting process by community representatives. Historically, Input Output has been the largest 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 strategic plan to decrease dependency on community funds. Input Output aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams will undertake most of the in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals can be categorized into two primary themes: scaling and Bitcoin DeFi integration. The most significant proposal supports a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano competitively 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. The second major proposal involves a system called Pogun, designed to introduce Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Other 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 providing upfront funding. 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. The outcome of the vote will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or continues to approve its requests based on historical deference. Last year's proposal of $97.5 million was approved, but significant changes have occurred since then, including the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, especially considering the availability of tools to fund development independently of Input Output.