Cardano Developer Requests Reduced Funding of $46.8 Million for Expansion and DeFi Integration

Input Output, the company responsible for developing the Cardano blockchain, is seeking a reduced amount of funding from the project's treasury. The company has submitted nine proposals totaling $46.8 million for 2026, which is roughly half of the $97.5 million requested in 2025. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a community-managed treasury that allocates funds for development work. Input Output has historically been the primary recipient of these funds due to its significant role in building the underlying software. However, the company is now aiming to reduce its reliance on community funding and become self-sufficient. The reduced funding request is part of a plan to phase out Input Output's dependence on community funds. The company intends to decrease its annual funding requests until it can sustain itself through its own revenue. This will allow community funds to be allocated to a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams to take over most of its in-house work, including firms like VacuumLabs and Midgard Labs that specialize in specific layers of the Cardano software. The nine proposals can be grouped into two main themes: scaling and Bitcoin DeFi. The first theme focuses on a consensus upgrade called Leios, which aims to increase Cardano's transaction processing capacity by 10 to 65 times. This would enable Cardano to compete with other fast blockchains like Solana and Ethereum layer-2 networks. Leios 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, which aims to bring Bitcoin-based decentralized finance to Cardano. This would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. 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 has specific delivery leads and ties funding to delivery milestones, rather than releasing funds upfront. Voting on the proposals will begin on Tuesday and run through May 24. The decisions will be made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. The vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. Last year's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software. This means that alternatives to Input Output now exist, and the vote will signal how much the Cardano community's thinking has shifted. 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. Total assets deposited on Cardano have also increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will indicate how much the Cardano community's perspective has changed, now that there are alternatives to Input Output for funding development.