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 treasury, marking a shift towards reduced dependency on community funds. The firm has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in the previous year. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. The Cardano network, similar to other major blockchains, has a communal fund that is allocated through a voting process, with Input Output historically being the primary recipient due to its significant role in the development of the underlying software. However, the company now aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects that smaller, specialized teams, such as VacuumLabs and Midgard Labs, will take over most of the work currently handled in-house. The proposals can be grouped into two main categories: scaling and Bitcoin DeFi. The first category includes a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would significantly enhance Cardano's competitiveness with other networks like Solana and Ethereum layer-2. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. The second key proposal involves a system called Pogun, designed to integrate Bitcoin-based decentralized finance into Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal is tied to specific delivery milestones, with funding allocated in stages rather than upfront. Voting on these proposals will begin on Tuesday and conclude on May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output differently now that alternative grant applicants and governance structures are in place. Input Output also highlighted ecosystem progress, 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.