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

Input Output, the private company responsible for developing the Cardano blockchain, is seeking to reduce its funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, a substantial decrease from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. Cardano, similar to other major blockchains, maintains a shared fund fueled by network fees, which is allocated towards development work 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. The reduced funding request marks the first step in a plan to decrease Input Output's reliance on community funds. The company aims to gradually reduce 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 on most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals can be grouped into two main themes. The first theme involves 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 upgrade is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal involves a system called Pogun, which aims 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 a centralized intermediary. Pogun's lending component is expected to be released publicly in the second quarter. Smaller proposals cover performance 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, rather than releasing funds upfront. Voting on the proposals opens on Tuesday and will run 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 scheduled to release a video making the case directly to these delegates. The vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on 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 core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano have risen from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's thinking has shifted, now that tools to fund development without Input Output exist.