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

The company behind the Cardano blockchain, Input Output, is seeking a substantially lower amount of funding from the community treasury this year. The firm has put forth nine proposals, amounting to $46.8 million, which marks a considerable reduction from its $97.5 million request in 2025. These proposals are geared towards enhancing Cardano's scalability and venturing into Bitcoin DeFi. Several of the proposals are centered around increasing the network's transaction capacity and exploring decentralized finance opportunities on Bitcoin. Cardano, similar to other prominent blockchains, has a communal fund that is sustained by network fees, with community representatives voting on how to allocate these funds for development purposes. Historically, Input Output has been the primary recipient of these funds due to its significant role in constructing and maintaining the underlying software. However, the reduced funding request signifies the first concrete step towards reducing this dependency. 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, the company expects smaller teams, such as VacuumLabs and Midgard Labs, to assume most of the tasks currently handled in-house. The nine proposals are categorized into two primary themes. The first theme focuses on a consensus upgrade called Leios, which Input Output claims will boost Cardano's transaction processing capacity by 10 to 65 times, enabling the network to process over 1,000 transactions per second. For context, this upgrade would position Cardano as a competitive network, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June, with a full deployment expected by the end of the year. The second flagship proposal involves a system called Pogun, designed to integrate Bitcoin-based decentralized finance into Cardano. This system would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other proposals address performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal specifies delivery leads and ties funding to delivery milestones, rather than releasing funds upfront. This approach is akin to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting commenced on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will determine 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, the governance organization overseeing this vote, 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 reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano rose 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 perspective has shifted, now that tools to fund development without Input Output are available.