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, is seeking a substantially lower amount of funding from the project's community treasury this year. The company has submitted nine proposals amounting to $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 capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund that is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company is now aiming to reduce its dependency on community funding by gradually decreasing its annual requests until it can sustain itself through its own revenue. This shift will enable community funds to support a wider range of smaller, specialized engineering teams. By the end of 2026, Input Output expects these teams, including VacuumLabs and Midgard Labs, to take over most of its current in-house work. The proposals submitted by Input Output can be grouped into two main categories. The first involves a consensus upgrade called Leios, which is expected to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other fast Ethereum layer-2 networks and Solana. Leios is scheduled for a test release in June and is expected to be fully deployed by the end of the year. The second key proposal focuses on a system called Pogun, designed to bring Bitcoin-based decentralized finance to Cardano. This system will allow Bitcoin holders to borrow and earn yield on their holdings without needing to rely on centralized intermediaries. Other proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery milestones and ties funding to the achievement of these milestones, rather than providing the full funding upfront. Voting on these proposals will begin on Tuesday and will run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of this vote will be a significant test of Cardano's governance system, which has undergone significant expansion over the past two years. It will determine whether Input Output is treated like any other grant applicant or if its requests continue to be approved based on its historical role in the project. Last year, Input Output's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist, which may influence the voting outcome. Input Output has also highlighted the progress made in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.