Cardano Developer Seeks Reduced Funding of $46.8 Million for Expansion and 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 amounting to $46.8 million, a notable decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to boost transaction processing capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchains, operates a communal fund sourced from 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 underlying software. However, the company is now aiming to reduce its reliance on community funding by gradually decreasing its annual requests until it can sustain itself through its own revenue. This shift will enable community funds to support a broader range of smaller, specialized engineering groups. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will assume most of the in-house work, focusing on specific aspects of the Cardano software. The submitted proposals are categorized into two primary themes: scaling and Bitcoin DeFi. A key proposal, Leios, aims to significantly enhance Cardano's transaction processing capacity, 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. Another notable proposal, Pogun, seeks to introduce Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. The lending component of Pogun is slated for public release in the second quarter. Additional proposals address 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, ensuring a staged release of funds based on project progress. The voting process, which commenced on Tuesday and will conclude on May 24, will be overseen by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output as 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 since evolved, with the Cardano Foundation assuming control of the project's grant-funding arm and Intersect taking stewardship of core Cardano software. This shift means that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano, from $137.5 million to $142.7 million. The voting results will signal the extent to which the Cardano community's perspective has shifted, given the emergence of tools to fund development independently of Input Output.