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

Input Output, the primary engineering firm responsible for Cardano's development, is seeking a substantially reduced amount of funding from the project's treasury. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, fueled by network fees, is allocated through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in the blockchain's development. However, the company now aims to decrease its annual funding requests, with the goal of becoming self-sustaining through its own revenue. This shift will enable community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take on a significant portion of its current responsibilities. The proposed projects are categorized into two main themes: scaling and Bitcoin DeFi. The Leios consensus upgrade is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. The Pogun system aims to introduce Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Smaller proposals focus on enhancing the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring a staged release of funds. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates representing ADA holders. The outcome of the 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 role in the project.