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, is seeking a substantially lower amount of funding from the community treasury this year. The firm has submitted nine proposals totaling $46.8 million for 2026, representing a reduction of approximately half from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other prominent blockchains, has a community-managed treasury that allocates funds to development projects through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the underlying software. However, the company is now aiming to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This strategy involves phasing out its dependency on community funds and instead supporting smaller, specialized engineering teams. By the end of 2026, Input Output expects these teams, including VacuumLabs and Midgard Labs, to take over a significant portion of its current in-house work. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi. The first theme involves a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, enabling the network to process over 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 flagship proposal focuses on a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to Cardano. This system would allow 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 performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components are completed. The voting process, which begins on Tuesday and runs through May 24, will be overseen 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 as 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 have created alternatives to Input Output, which may impact 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, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.