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

The company behind the Cardano blockchain, Input Output, is requesting roughly half the funding it sought last year from the project's treasury, marking a shift towards reducing its dependence on community funds. The firm has submitted nine proposals amounting to $46.8 million for 2026, down from $97.5 million in the previous year. Several proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a communal fund fueled by network fees, which 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 now aims to gradually decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects that smaller, specialized teams, such as VacuumLabs and Midgard Labs, will take over most of its in-house work, focusing on specific layers of the Cardano software. The submitted proposals are grouped into two primary themes: scaling and Bitcoin DeFi integration. A key proposal funds the development of Leios, a consensus upgrade that promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially reaching over 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal supports the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals address performance 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 delivery milestones, ensuring a staged release of funds based on the completion of project components. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate 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 since then, the Cardano Foundation has taken over the project's grant-funding arm, 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 approach to funding development, now that alternatives to Input Output exist.