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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is requesting roughly half the funding it sought last year from the project's treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. These proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin decentralized finance opportunities. Cardano's community treasury, funded by network fees, is allocated through a voting process by community representatives. 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 reduce its dependency on these funds by decreasing its annual 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 specialized teams like VacuumLabs and Midgard Labs to take over most of its current in-house work. The submitted proposals are divided into two main themes: the first involves a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, aiming for over 1,000 transactions per second. This would position Cardano competitively with other fast Ethereum layer-2 networks and Solana in terms of throughput. Leios is slated for a test release in June and full deployment by the end of the year. The second key proposal funds a system called Pogun, designed to integrate Bitcoin-based decentralized finance into 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. Other proposals cover enhancements to 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, adopting a staged payment approach similar to paying a contractor as different parts 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 representing ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output differently now that alternatives exist for grant funding and core software stewardship. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which has seen 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The fate of these proposals will signal a shift in the Cardano community's approach to funding development, now that alternatives to Input Output are available.