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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, maintains a communal fund fueled by network fees, which is allocated towards development projects through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in building the underlying software. However, the company aims to reduce its reliance on community funding and become self-sufficient through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over a significant portion of its current responsibilities, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. The most substantial proposal funds the development of Leios, a consensus upgrade that promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 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 key proposal supports the development of Pogun, a system designed to integrate Bitcoin-based decentralized finance into Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Smaller 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 the achievement of milestones, rather than providing upfront funding. Voting on these proposals began on Tuesday and will continue until May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output as any other grant applicant or continues to favor its proposals. Last year's $97.5 million proposal was approved, but the Cardano Foundation has since taken over the project's grant-funding arm, and Intersect has assumed responsibility for the core Cardano software, providing alternatives to Input Output. Input Output also highlighted the progress made in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.