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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury compared to the previous year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a notable reduction from the $97.5 million requested in 2025. These proposals primarily focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a communal fund fueled by network fees, which is allocated towards development work through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying software. However, the reduced funding request is part of a broader plan to decrease dependency on community funds, aiming for Input Output to become self-sustaining through its own revenue. By the end of 2026, the company expects smaller, specialized teams to assume a substantial portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are categorized into two main themes: the first involves a consensus upgrade called Leios, designed to significantly increase Cardano's transaction processing capacity, potentially making it competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. The second theme revolves around a system called Pogun, aimed at introducing Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Additional proposals cover 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 the achievement of delivery milestones, adopting a staged payment approach. Voting on these proposals commenced on Tuesday and will conclude on May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will be a crucial test of whether Cardano's governance treats Input Output similarly to other grant applicants or if it continues to approve its requests based on historical precedence. Meanwhile, Input Output has highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has seen significant circulation, and an increase in total assets deposited on Cardano, indicating growing network usage.