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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is requesting roughly half the funding it sought last year from the project's treasury. The company has submitted nine proposals totaling $46.8 million for the 2026 cycle, down from $97.5 million in the previous year. Several proposals focus on enhancing Cardano's scalability to increase its transaction capacity and expanding into Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund allocated by network fees, which community representatives vote to allocate for development purposes. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying software. However, the company aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support smaller engineering groups. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take over most of its in-house work, focusing on specific layers of the Cardano software. The proposals are divided into two main themes: scaling and Bitcoin DeFi. The primary funding proposal supports 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 would make Cardano competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal funds a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is targeted for public release 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 begins 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 has assumed stewardship of core Cardano software, providing alternatives to Input Output. 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, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The outcome of the vote will signal the shift in the Cardano community's perspective on funding development, now that alternatives to Input Output exist.