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

Input Output, the company responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of what was requested in 2025, marking a significant reduction in funding. The proposals focus on enhancing the scalability of the Cardano network to increase its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano's community treasury, which is funded by network fees, allows community representatives to vote on the allocation of funds for development work. Historically, Input Output has been the largest recipient of these funds due to its significant role in building the underlying software. However, the company now aims to reduce its dependence on community funding by decreasing its annual requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals can be grouped into two main themes: scaling and Bitcoin DeFi integration. The largest proposal funds the development of Leios, a consensus upgrade that aims to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would significantly enhance Cardano's competitiveness with other major blockchains like Solana and Ethereum. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal focuses on Pogun, a system designed to bring Bitcoin-based decentralized finance to the Cardano network. This would allow Bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Other proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components are completed. Voting on the proposals begins on Tuesday and will run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. These delegates represent ADA holders and will determine the fate of Input Output's proposals. The outcome of the vote will test 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. The Cardano ecosystem has seen significant progress, with a new stablecoin, USDCx, reaching 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on the Cardano network have also increased from $137.5 million to $142.7 million over the same period. The vote's outcome will signal how the Cardano community's perspective has shifted, now that alternatives to Input Output exist for funding development.