Cardano Developer Requests 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 amounting to $46.8 million for 2026, marking a considerable reduction from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano's community treasury, which is funded by network fees, is allocated through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in the development of the blockchain. However, the company now aims to reduce its reliance on community funding and plans to decrease 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 engineering groups. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take over most of the work currently handled in-house. The proposals are centered around two primary 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, allowing it to compete with other major blockchains like Solana and Ethereum. Leios 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, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Other proposals focus on improving the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different parts of the project are completed. The voting process, which opened on Tuesday and will run through May 24, will be decided by roughly 1,000 elected delegates representing ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output like 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 the governance structure has undergone significant changes since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These shifts mean that alternatives to Input Output now exist, and the vote will test the community's willingness to support the company's reduced funding request. Meanwhile, Input Output has reported progress in the ecosystem, 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.