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

The company responsible for building and maintaining the Cardano blockchain, Input Output, is seeking a substantially lower amount of funding from the project's treasury this year. The firm has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity, as well as expanding into the realm of Bitcoin DeFi. Cardano, similar to other major blockchains, relies on a communal pool of funds generated by 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. However, the reduced funding request represents the first concrete step in a plan to gradually decrease the company's dependency on community funds. Input Output aims to reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, the company expects smaller, specialized teams to take over a significant portion of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The nine proposals can be grouped into two primary themes: scaling and Bitcoin DeFi integration. A significant portion of the funding is allocated towards a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is scheduled for a test release in June and is expected to be fully deployed by the end of the year. For context, this would position Cardano as a competitive chain, rivaling Solana and the fastest Ethereum layer-2 networks in terms of throughput. The second flagship proposal is dedicated to a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system 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 improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to the achievement of delivery milestones, rather than releasing funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting on these proposals began on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will test 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 significant changes have occurred since then, including the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These shifts mean that alternatives to Input Output now exist, which could influence the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano, a key measure of network usage, increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how the Cardano community's perspective has shifted, now that there are tools in place to fund development without relying on Input Output.