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

The company behind the Cardano blockchain, Input Output, is seeking a smaller portion of the project's community treasury for 2026, with a total of nine proposals amounting to $46.8 million. This marks a substantial reduction from the $97.5 million requested in 2025. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. 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 now aims to decrease its reliance on community funding by reducing its annual requests, with the goal of becoming self-sufficient through its own revenue. This shift is expected to allow smaller, specialized engineering teams to take on a larger share of the development work, including firms like VacuumLabs and Midgard Labs, by the end of 2026. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. A key proposal is the Leios consensus upgrade, which promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This would position Cardano competitively with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June, with full deployment expected by the end of the year. Another significant proposal is the Pogun system, designed to introduce Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals address performance enhancements 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 the achievement of delivery milestones, rather than providing upfront funding. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. Last year's $97.5 million proposal was approved, but the governance landscape has since evolved, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, 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 fate of the proposals - whether they are fully funded, partially funded, or reshaped - will signal the extent to which the Cardano community's perspective has shifted, now that mechanisms to fund development beyond Input Output are in place.