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

Input Output, the private company responsible for developing the Cardano blockchain, is requesting approximately half the funding it sought last year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and expanding into Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a shared fund sourced from network fees, which community representatives vote to allocate towards development projects. Input Output has historically been the largest recipient due to its significant role in employing engineers who build the underlying software. However, the reduced funding request marks the first step towards phasing out this dependency, with Input Output aiming to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams to take on most of its current in-house work, including firms like VacuumLabs and Midgard Labs that specialize in specific layers of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. A significant portion of the funding is allocated to a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano as a competitive chain, comparable to 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 funds a system called Pogun, designed to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Smaller 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 upfront funding. Voting, which is open to roughly 1,000 elected delegates known as DReps representing ADA holders, will run through May 24. 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 historical deference. Last year's $97.5 million proposal was approved, but the governance landscape has shifted with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software, providing alternatives to Input Output. Input Output also highlighted ecosystem progress, 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.