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

Input Output, the private company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a 52% decrease from its $97.5 million request in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchains, operates a community-funded treasury, which is allocated towards development projects through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in building and maintaining the underlying software. However, this reduced funding request is part of a broader plan to phase out Input Output's dependence on community funds. The company aims to gradually decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams, such as VacuumLabs and Midgard Labs, will take on a significant portion of the work currently handled in-house, including specific layers of the Cardano software. The proposals are categorized into two primary themes: scaling and Bitcoin DeFi integration. The most substantial funding is allocated to the Leios consensus upgrade, 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 full deployment by the end of the year. For context, the successful implementation of Leios would position Cardano as a competitive force alongside Solana and the fastest Ethereum layer-2 networks in terms of throughput. The second key proposal focuses on the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter. Additional proposals cover various enhancements, including performance improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal specifies delivery leads and ties funding to the completion of specific milestones, rather than releasing the funds upfront. This approach is akin to paying a contractor in stages as different components of a project are completed. Voting on these proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week, directly addressing these delegates and making the case for the proposals. The outcome of this vote will be a significant test of Cardano's governance model, which has expanded substantially 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 largely on the basis of its historical role in the project. 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 the 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 reached 14.6 million tokens in circulation within weeks. Additionally, total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The fate of the proposals, whether they are fully approved, partially funded, or significantly altered by the DReps, will signal a shift in the Cardano community's approach to development funding, now that tools and alternatives to Input Output are available.