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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is requesting a substantially smaller amount of funding from the community treasury for 2026. The company has submitted nine proposals totaling $46.8 million, which is roughly half of the $97.5 million it requested 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 that is fueled by network fees, and community representatives vote 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 developing the underlying software. The reduced funding request marks the first concrete step in a plan to gradually decrease Input Output's reliance on community funds. The company aims to reduce 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, Input Output anticipates that smaller, specialized teams will take over most of its current in-house work, including companies like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals can be grouped into two primary themes. The first theme revolves around a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. For context, this upgrade would significantly enhance Cardano's performance, making it competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and is expected to be fully deployed by the end of the year. The second flagship proposal involves a system called Pogun, which aims to integrate Bitcoin-based decentralized finance into Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals cover various improvements, including 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 the funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting on the proposals begins on Tuesday and will run through May 24. The decisions will be made by approximately 1,000 elected delegates known as DReps, who represent ADA holders in a manner similar to proxy representatives in a publicly traded company. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week to make the case directly to these delegates. The vote will serve as a test of whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests largely out of 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 the core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not during previous votes. Input Output also highlighted progress within the ecosystem, noting that a new Cardano stablecoin, USDCx, has reached 14.6 million tokens in circulation within weeks of its launch. Additionally, the total assets deposited on Cardano, a common measure of a network's usage, have risen from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the full slate is approved, partially funded, or reshaped entirely by DReps, will signal how much the Cardano community's perspective has shifted now that the tools to fund development without Input Output are in place.