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

Input Output, the company that developed and maintains the Cardano blockchain, is seeking a significantly reduced amount of funding from the community treasury for 2026. The company has submitted nine proposals totaling $46.8 million, which marks a substantial decrease from the $97.5 million requested in 2025. The proposals primarily focus on scaling the Cardano network to enhance its transaction processing capacity and expanding into the Bitcoin DeFi space. Cardano's community treasury, which is funded by network fees, 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 underlying software. However, the company now aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This move is expected to allow smaller, specialized teams to take on more responsibilities, including VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are divided into two main themes: scaling and Bitcoin DeFi. The most significant proposal is for a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This would position Cardano as a competitive player in the market, alongside Solana and the fastest Ethereum layer-2 networks. The Leios upgrade is scheduled for a test release in June and full deployment by the end of the year. Another key proposal is for a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without having to rely on a centralized intermediary. The smaller proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different components are completed. The voting process, which is open to roughly 1,000 elected delegates representing ADA holders, will run from Tuesday until May 24. The outcome of the vote will indicate whether Cardano's governance treats Input Output as any other grant applicant or continues to approve its requests based on its historical role in the project. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of the core Cardano software, providing alternatives to Input Output. In its release, Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million.