Cardano Developer Submits $46.8 Million Funding Proposal for Enhanced Scalability and DeFi Integration

Input Output, the primary engineering company responsible for developing the Cardano blockchain, is seeking a substantially reduced amount of funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for the 2026 cycle, marking a decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and expanding its presence in the Bitcoin DeFi space. Cardano, similar to other major blockchains, operates a shared pool of funds generated from network fees, which are allocated towards development work through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in building the underlying software. However, the company is now taking steps to reduce its dependence on community funding, aiming to decrease its annual requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are categorized into two primary themes: scaling and Bitcoin DeFi. The largest proposal funds the Leios consensus upgrade, which is expected to 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 full deployment by the end of the year. The second major proposal supports the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano, allowing 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. Additional 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 delivery milestones, ensuring a staged release of funds based on the completion of project components. Voting on these proposals is set to begin and will run through May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome of this 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. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software, providing alternatives to Input Output and potentially influencing the voting outcome. Input Output has also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million.