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

Input Output, the private company responsible for developing the Cardano blockchain, is seeking a substantially reduced amount of funding from the project's community treasury. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. The proposals prioritize scaling Cardano to enhance its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, maintains a communal fund fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the underlying software. However, the company is now taking steps to reduce its dependency on community funding. The reduced funding request is part of a plan to gradually decrease Input Output's annual requests until the company can sustain itself through its own revenue, allowing community funds to support a broader range of 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 nine proposals are categorized into two primary themes: scaling and Bitcoin DeFi. The larger proposals focus on a consensus upgrade called Leios, which aims to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This upgrade would significantly enhance Cardano's competitiveness with other blockchains, such as Solana and Ethereum layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. The second flagship proposal involves a system called Pogun, designed to introduce Bitcoin-based decentralized finance to Cardano. This would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Smaller proposals address 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. The voting process, which begins on Tuesday and runs through May 24, will be overseen by roughly 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 as any other grant applicant or continues to approve its requests based on deference. 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, the governance organization, has assumed stewardship of core Cardano software. These changes have created alternatives to Input Output, which may impact the voting outcome. Input Output has also highlighted progress within the ecosystem, 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.