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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury for 2026. The company has submitted nine proposals totaling $46.8 million, which marks a considerable reduction from the $97.5 million requested in 2025. Several of these proposals are focused on enhancing Cardano's scalability to increase its transaction processing capacity, as well as expanding into the realm of Bitcoin decentralized finance (DeFi). Cardano, similar to other major blockchain networks, maintains a shared fund that is fueled by network fees. This fund is allocated towards development work through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who build the underlying software. The reduced funding request is the first concrete step towards a plan aimed at phasing out Input Output's dependency on community funds. The company now aims to gradually decrease its annual funding requests until it can sustain itself through its own revenue streams, allowing community funds to be allocated to a broader range of smaller, specialized engineering groups. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will take on the majority of the work currently handled in-house. These teams focus on specific layers of the Cardano software, marking a significant shift in the project's development approach. The submitted proposals are categorized into two primary themes. The first involves a consensus upgrade known as Leios, which Input Output claims will significantly enhance Cardano's transaction processing capacity by 10 to 65 times. This upgrade aims to increase the network's throughput to over 1,000 transactions per second, making it competitive with Solana and the fastest Ethereum layer-2 networks in terms of transaction speed. Leios is scheduled for a test release in June, with a full deployment expected by the end of the year. The second major proposal involves a system called Pogun, designed to integrate Bitcoin-based DeFi into the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to rely on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter of the year. Additionally, smaller proposals cover various 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 the achievement of delivery milestones, rather than providing upfront funding. Voting on these proposals is set to begin and will run through May 24. The decision-making process will be carried out by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is expected to release a video addressing the delegates directly to make the case for the proposals. The outcome of this vote will test whether Cardano's governance treats Input Output as any other grant applicant or continues to approve its requests based on historical deference. Last year's $97.5 million proposal was approved, but the governance structure has undergone significant changes since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These shifts 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. Furthermore, the total assets deposited on Cardano have increased from $137.5 million to $142.7 million over the same period, indicating growing usage of the network. The outcome of the vote will signal how the Cardano community's perspective has shifted, particularly now that there are tools in place to fund development independently of Input Output.