Cardano Developer Requests Reduced Funding of $46.8 Million for Expansion and 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 this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from its $97.5 million request in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano's community treasury, which is 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 underlying software. However, the company now aims to reduce its dependency on community funds by decreasing its annual funding requests. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals can be grouped into two main themes. The first theme involves a consensus upgrade called Leios, which is expected to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other major blockchains like Solana and Ethereum. 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 integrate Bitcoin-based decentralized finance into Cardano. This would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover various 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 parts of the project are completed. The voting process, which opens on Tuesday and runs through May 24, will be decided by roughly 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical significance in the project. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization running this vote, has assumed stewardship of core Cardano software, providing alternatives to Input Output. Additionally, Input Output has reported 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.