Cardano Developer Requests Reduced Funding of $46.8 Million for Expansion and Bitcoin 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 notable decrease from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to boost its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a communal fund fueled by network fees, which is 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. However, the reduced funding request signifies the first concrete step towards reducing this dependency. Input Output aims to gradually decrease 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, the company expects smaller, specialized teams, such as VacuumLabs and Midgard Labs, to take over most of its current in-house work. The submitted proposals are categorized into two main themes. The first theme involves a consensus upgrade called Leios, 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 slated for a test release in June and full deployment by the end of the year. The second flagship 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 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 rather than providing the funds upfront. 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 this 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 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 may influence the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano 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 tools in place to fund development without relying on Input Output.