Cardano Developer Seeks 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 community treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a 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 and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared pool of funds allocated by network fees, which are voted on by community representatives for development purposes. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company aims to reduce its dependency on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This reduced funding request is the first step in this plan, with the goal of allocating community funds to a broader range of smaller engineering groups in the future. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take on most of the work currently handled in-house. The nine proposals can be grouped into two primary themes: scaling and Bitcoin DeFi. The most significant funding is allocated to a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, enabling the network to process over 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. The second major proposal funds a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to Cardano. This system would allow Bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Other proposals cover performance improvements 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, ensuring that funds are released in stages as different components of the project are completed. Voting on these proposals will take place from Tuesday through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. The outcome of this 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 role in the project. Last year's $97.5 million proposal was approved, but the governance landscape has shifted since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. 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. The outcome of the vote will signal how the Cardano community's perspective has shifted, given the existence of tools to fund development without relying on Input Output.