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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable reduction from its $97.5 million request in 2025. Several of these proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a communal fund fueled by network fees, which is allocated by community representatives 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 aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This reduction is part of a broader plan to diversify the development of the Cardano ecosystem, allowing smaller, specialized teams to take on more responsibilities. By the end of 2026, Input Output expects that a significant portion of its current workload will be outsourced to firms like VacuumLabs and Midgard Labs, which specialize in specific aspects of the Cardano software. The proposals can be broadly categorized into two themes: scaling and Bitcoin DeFi integration. One of the key proposals is for a consensus upgrade called Leios, which promises to increase Cardano's transaction processing capacity significantly, potentially making it competitive with other leading blockchains like Solana and Ethereum's layer-2 networks. Leios is slated for a test release in June, with full deployment expected by the end of the year. Another significant proposal is for a system called Pogun, designed to bring Bitcoin-based decentralized finance to the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their holdings without needing to rely on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter of the year. The remaining proposals cover a range of improvements, including enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components of the project are completed. Voting on these proposals will begin on Tuesday and conclude on May 24, with decisions made by approximately 1,000 elected delegates who represent ADA holders. The outcome of this vote will be a significant test of Cardano's governance structure, particularly in how it treats Input Output's funding requests now that alternative development paths and governance structures are in place. Last year, Input Output's $97.5 million proposal was approved, but the landscape has changed with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These changes mean that alternatives to Input Output now have a more defined role in the ecosystem. Additionally, Input Output highlighted the progress within the Cardano ecosystem, including the launch of a new stablecoin, USDCx, which has seen significant circulation, and an increase in total assets deposited on the network. The fate of Input Output's proposals will provide insight into the evolving dynamics within the Cardano community and its approach to development and funding.