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

The company behind the Cardano blockchain, Input Output, is seeking a reduced amount of funding from the project's community treasury, marking a shift towards greater financial independence. The firm has submitted nine proposals amounting to $46.8 million for the 2026 funding cycle, down from $97.5 million in the previous year. These proposals focus on enhancing the network's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, fueled by network fees, is allocated through a voting process, with Input Output historically being the largest recipient due to its significant role in the blockchain's development. However, the company now aims to gradually decrease its funding requests, allowing smaller engineering groups to take on more responsibilities. By the end of 2026, Input Output expects specialized teams to handle most of its current in-house work, including firms like VacuumLabs and Midgard Labs. The proposals are divided into two main themes: scaling the network and integrating Bitcoin DeFi. The Leios consensus upgrade, for instance, promises to increase Cardano's transaction processing capacity by 10 to 65 times, making it competitive with other major blockchains. Another key proposal is the Pogun system, which aims to enable Bitcoin-based decentralized finance on Cardano, allowing users to borrow and earn yield on their Bitcoin holdings without relying on centralized intermediaries. Additional proposals cover improvements to the smart contract engine, security testing, developer tools, and API services. Each proposal outlines specific delivery milestones and ties funding to these milestones, ensuring a more staged and performance-based allocation of funds. The voting process, which opens on Tuesday and runs through May 24, will be overseen by roughly 1,000 elected delegates representing ADA holders. The outcome of this vote will test the maturity of Cardano's governance, determining whether Input Output is treated as any other grant applicant or if it continues to receive preferential treatment. Meanwhile, the Cardano ecosystem has shown signs of growth, with the launch of a new stablecoin, USDCx, and an increase in total assets deposited on the network.