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, down from $97.5 million in the previous year. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a community-funded treasury that allocates resources for development work 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 now aims to reduce its reliance 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 in-house work, including firms like VacuumLabs and Midgard Labs. The nine proposals can be categorized into two main themes: scaling and Bitcoin DeFi. The most significant proposal is for a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times. Another key proposal is for a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Other proposals cover performance 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 delivery milestones rather than providing upfront funding. The voting process, which opens on Tuesday and runs through May 24, will be overseen by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. In the interim, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software, providing alternatives to Input Output. Input Output has also 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.