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

The company behind the Cardano blockchain is seeking a substantially lower amount of funding from the community treasury this year. Input Output has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from its $97.5 million request in 2025. These proposals primarily focus on enhancing Cardano's scalability to increase its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchains, operates a shared fund fueled by network fees, which is allocated towards development projects through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, this reduced funding request is part of a larger plan to decrease Input Output's reliance on community funds. The company aims to gradually 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 teams. By the end of 2026, Input Output anticipates that smaller, specialized teams will undertake most of its current in-house work. This includes firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. A significant portion of the funds will go towards a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade aims to enhance Cardano's competitiveness with other blockchains like Solana and Ethereum's layer-2 networks in terms of throughput. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another key proposal involves a system called Pogun, designed to introduce Bitcoin-based decentralized finance to 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 outlines specific delivery leads and ties funding to the achievement of delivery milestones, rather than providing the funds upfront. Voting on these proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or continues to approve its requests based on historical precedent. Last year, Input Output's $97.5 million proposal was approved, but significant changes have occurred 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 core Cardano software. These changes mean that alternatives to Input Output now exist, which could influence the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation. Additionally, total assets deposited on Cardano have increased from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, given the existence of tools to fund development independently of Input Output.