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 reduced amount of funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from the $97.5 million requested in 2025. 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 communal fund supported by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company now aims to gradually reduce its reliance on community funding, with plans to become self-sustainable through its own revenue. By the end of 2026, Input Output anticipates that smaller, specialized teams will assume most of its current responsibilities, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. A key proposal involves the development of Leios, a consensus upgrade designed to significantly enhance Cardano's transaction processing capacity, potentially increasing it by 10 to 65 times. This upgrade is scheduled for a test release in June, with full deployment expected by the end of the year. Another significant proposal is the Pogun system, 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. The Pogun lending component is targeted for public release in the second quarter. Smaller proposals cover various improvements, including 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 achievement milestones, ensuring a staged release of funds based on progress. The voting process, which opened on Tuesday and will run through May 24, will be overseen by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or continues to favor its proposals. Last year's $97.5 million proposal was approved, but the landscape has changed with 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, potentially influencing the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million.