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 seeking a substantial reduction in funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, which is roughly half of the $97.5 million requested in 2025. Several of these proposals are focused on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. The Cardano network, similar to other major blockchains, has a shared fund that is fueled by network fees and allocated by community representatives for development purposes. Historically, Input Output has been the primary recipient of these funds due to its significant role in building the underlying software. However, the company is now taking steps to reduce its dependency on community funding, with the goal of becoming self-sustaining through its own revenue. This reduction in funding requests is the first concrete step towards achieving this goal, with plans to gradually decrease the amount of funding requested each year. By the end of 2026, Input Output expects smaller, specialized teams to take on a significant portion of the work currently handled in-house, including collaborations with firms such as VacuumLabs and Midgard Labs. The proposals submitted by Input Output can be grouped into two primary themes: scaling and Bitcoin DeFi. The most substantial proposal is for a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing it to compete with other fast-paced networks such as Solana and Ethereum's layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another key proposal is for a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. The lending component of Pogun is expected to be released publicly in the second quarter. Smaller proposals focus on enhancing the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different components of the project are completed. The voting process, which begins on Tuesday and runs through May 24, will be overseen by roughly 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will be a significant test of Cardano's governance, which has undergone significant expansion over the past two years, and will determine whether Input Output is treated as any other grant applicant or continues to receive preferential treatment. The Cardano community's decision will signal a shift in its approach to funding development, as alternatives to Input Output have emerged, including the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software.