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 substantial reduction in funding from the project's community treasury. The company has submitted nine proposals for a total of $46.8 million, representing a decrease of over 50% from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and expanding its presence in the Bitcoin DeFi space. The Cardano network, similar to other major blockchains, has a communal fund that is fueled by network fees, which are then allocated to development projects 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 is now taking steps to reduce its reliance on community funding, aiming to decrease its annual requests until it can sustain itself through its own revenue. This shift will allow community funds to be redirected towards smaller, specialized engineering groups, such as VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. By the end of 2026, Input Output expects these smaller teams to take on a significant portion of the work currently handled in-house. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi integration. The most substantial proposal is for a consensus upgrade called Leios, which promises to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is scheduled for a test release in June, with full deployment expected by the end of the year. Another notable proposal is for a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is slated for public release in the second quarter. Smaller proposals cover various improvements, including enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery milestones and ties funding to these milestones, rather than releasing funds upfront. The voting process, which begins 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 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 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 have created alternatives to Input Output, which may influence the voting outcome. Input Output also highlighted progress within 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 result of the vote will signal the Cardano community's willingness to adapt and support development without relying solely on Input Output.