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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable reduction from its $97.5 million request in 2025. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a community-funded treasury that is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company is now taking steps to reduce its dependence on community funding. 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 broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current in-house work. This includes collaborations with firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. A key proposal is the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, enabling the blockchain to process over 1,000 transactions per second. This upgrade is scheduled for a test release in June and is expected to be fully deployed by the end of the year. Another significant proposal is the Pogun system, designed to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system will allow bitcoin holders to borrow and earn yields on their holdings through Cardano without relying on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals address 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 and leads, ensuring that funding is released in stages as different components are completed. Voting on these proposals begins on Tuesday and will continue through May 24. The decisions will be made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is expected to release a video this week, directly addressing the delegates and making the case for the proposals. The outcome of the vote will indicate whether Cardano's governance treats Input Output like any other grant applicant or if it continues to approve its requests based on historical deference. 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, potentially influencing the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation. Additionally, the total assets deposited on Cardano have increased from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, given the existence of tools to fund development independently of Input Output.