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

Input Output, the engineering firm responsible for developing the Cardano blockchain, is seeking a significantly reduced amount of funding from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for the 2026 funding cycle, which marks a substantial decrease from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity, as well as expanding into the realm of Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a shared pool of funds generated from network fees, which are allocated towards development work through a voting process by community representatives. Historically, Input Output has been the primary recipient of these funds due to its significant role in employing the engineers who develop the underlying software. However, the reduced funding request represents the first concrete step in a plan to gradually reduce Input Output's dependency on community funds. The company now aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to be allocated to a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller, specialized teams to take on the majority of the work currently handled in-house, including firms such as VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals can be grouped into two primary themes. The first theme involves a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. For context, this would elevate Cardano from a relatively slower chain to one that is competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal involves a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. In practice, this would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without having to relinquish custody to a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal specifies delivery leads and ties funding to delivery milestones, rather than releasing funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. Voting commenced on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders in a manner similar to proxy representatives in a publicly traded company. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week, making a direct appeal to these delegates. The vote will serve as a test of whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests largely out of 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, the governance organization overseeing this vote, has assumed stewardship of core Cardano software. These shifts mean that alternatives to Input Output now exist in a way they did not during previous votes. 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 of its launch. The total assets deposited on Cardano, a common measure of a network's usage, rose from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the full slate is approved, partially funded, or entirely reshaped by DReps, will signal the extent to which the Cardano community's perspective has shifted now that the tools to fund development without Input Output are in place.