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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this 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 focus on enhancing Cardano's scalability to increase its transaction capacity and exploring the integration of Bitcoin-based decentralized finance (DeFi) solutions. Cardano, similar to other major blockchains, relies on a community-funded treasury, which is allocated through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the underlying software. However, the company aims to reduce its reliance on community funding over time, with the goal of becoming self-sustaining through its own revenue. By the end of 2026, Input Output plans to have smaller, specialized teams take over a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals can be grouped into two main categories: scaling and Bitcoin DeFi integration. A key proposal is 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 would position Cardano competitively alongside other fast Ethereum layer-2 networks and Solana in terms of throughput. Leios is slated for a test release in June, with full deployment expected by the end of the year. Another significant proposal involves Pogun, a system designed to introduce Bitcoin-based DeFi to Cardano, allowing bitcoin holders to borrow and earn yield on their bitcoin without needing to rely on a centralized intermediary. The lending component of Pogun 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 the achievement of milestones, rather than providing upfront funding. The voting process, which is open to roughly 1,000 elected delegates representing ADA holders, will determine the fate of these proposals. The outcome will be a test of Cardano's governance system, which has evolved significantly over the past two years, and will indicate whether Input Output is treated as any other applicant or if its requests continue to be approved based on its historical role in the project. Last year, Input Output's $97.5 million proposal was approved, but the landscape has changed with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software, providing alternatives to Input Output that did not exist previously. Input Output also highlighted the progress of the ecosystem, 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 the proposals, whether they are fully funded, partially funded, or significantly altered, will reflect the shifting dynamics within the Cardano community and its approach to development funding.