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

Input Output, the engineering firm responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of the $97.5 million requested in the previous year. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano's community treasury, which is funded by network fees, allocates resources to development projects 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 now aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposed projects are categorized into two main themes: scaling and Bitcoin DeFi integration. A key proposal is the Leios consensus upgrade, which promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially handling 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 significant proposal is the Pogun system, designed to bring Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to lend and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Additional 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, ensuring a staged release of funds based on project progress. Voting on these proposals opens and will run through May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output differently now that alternative grant applicants and core software stewards have emerged. Meanwhile, Input Output has 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.