Cardano Developer Seeks Reduced Funding for Blockchain Expansion and Bitcoin DeFi Integration

Input Output, the engineering organization responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of the $97.5 million requested in 2025. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, fueled by network fees, is allocated through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in the blockchain's development. However, the company now aims to decrease its dependency on community funds by reducing its annual funding requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to undertake most of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs. The proposals are grouped into two main themes: scaling and Bitcoin DeFi. A key proposal, Leios, promises to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano competitively with other major blockchains like Solana and Ethereum's layer-2 networks. Leios is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal, Pogun, aims to introduce Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their assets without relying on centralized intermediaries. Pogun's lending component is set for public release in the second quarter. Smaller proposals address performance improvements for Cardano's smart contract engine, security testing, developer tools, and expanded API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring a staged release of funds based on project progress. Voting on these proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or if it 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 grant funding, and Intersect has assumed stewardship of core Cardano software, providing alternatives to Input Output. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The fate of the proposals will signal the shift in the Cardano community's perspective now that alternatives to Input Output exist for funding development.