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

The company behind the Cardano blockchain, Input Output, is seeking a substantially lower amount of funding from the project's community treasury this year. The firm has submitted nine proposals amounting to $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 boost its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other prominent blockchains, has a shared fund fueled by network fees, which is allocated by community representatives 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 aiming to reduce its reliance on community funding by gradually decreasing its annual requests until it can sustain itself through its own revenue. By the end of 2026, Input Output anticipates that smaller, specialized teams will assume most of its current responsibilities, including firms like VacuumLabs and Midgard Labs that concentrate on specific aspects of the Cardano software. The proposals submitted by Input Output can be grouped into two main categories. The first involves a consensus upgrade called Leios, which is expected 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 and full deployment by the end of the year. The second key proposal is for a system called Pogun, designed to introduce Bitcoin-based decentralized finance to Cardano. 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 expected to be released publicly in the second quarter. Other proposals cover 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 the completion of milestones rather than providing the funds upfront. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate 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, Input Output'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 the core Cardano software. These changes mean that alternatives to Input Output now exist, which may influence 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 result of the vote will signal how the Cardano community's perspective has shifted, given the availability of tools to fund development independently of Input Output.