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

The company behind the Cardano blockchain, Input Output, is seeking approximately half the funding it requested last year from the project's treasury. The firm has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. These proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and expanding into the realm of Bitcoin decentralized finance. Cardano, similar to other major blockchain networks, operates a shared pool of funds generated from network fees, which are 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 develop the underlying software. The reduced funding request marks the first step in a plan to decrease dependency on community funds, with the goal of Input Output sustaining itself through its own revenue. The company aims to gradually reduce its annual funding requests until it can operate independently, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams to take on the majority of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that specialize in specific layers of the Cardano software. The submitted proposals are categorized into two primary themes: scaling and Bitcoin DeFi. The more substantial proposals fund the development of Leios, a consensus upgrade that Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, aiming for over 1,000 transactions per second. This upgrade would position Cardano as a competitive network, rivaling Solana and the fastest Ethereum 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. The second significant proposal supports the development of Pogun, a system designed to integrate Bitcoin-based decentralized finance into Cardano. This would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover 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 delivery milestones, rather than releasing funds upfront. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on historical deference. Last year's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization, has assumed stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, which may influence the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks. Total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal the shift in the Cardano community's perspective, now that tools to fund development without Input Output are available.