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 community treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, a considerable reduction from the $97.5 million it requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, which is fueled by network fees, 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 blockchain's underlying software. However, the company aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its in-house work, including collaborations with firms like VacuumLabs and Midgard Labs. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. The first theme involves a consensus upgrade called Leios, which promises to 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 flagship proposal involves a system called Pogun, designed to bring Bitcoin-based decentralized finance to Cardano. This system would allow 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 performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components are completed. Voting on these proposals will commence 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 this vote will indicate whether Cardano's governance treats Input Output as any other grant applicant or continues to approve its requests based on its historical significance. Last year's $97.5 million proposal was approved, but the governance landscape has changed 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, potentially influencing the voting outcome. Input Output also highlighted the progress made in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.