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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury compared to the previous year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. The proposals primarily focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund that is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company now aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This reduction in funding requests is part of a broader plan to diversify the development of the Cardano ecosystem, allowing smaller, specialized teams to take on more responsibilities. By the end of 2026, Input Output expects that a significant portion of its current workload will be outsourced to external firms, such as VacuumLabs and Midgard Labs, which specialize in specific aspects of the Cardano software. The proposals can be categorized into two main themes: scaling and Bitcoin DeFi integration. One of the primary proposals involves the development of Leios, a consensus upgrade designed to significantly increase Cardano's transaction processing capacity, potentially by 10 to 65 times, allowing the network to process over 1,000 transactions per second. This upgrade is scheduled for a test release in June, with a full deployment expected by the end of the year. Another key proposal focuses on the introduction of Pogun, a system aimed at integrating Bitcoin-based decentralized finance into the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their holdings without the need for a centralized intermediary. The Pogun lending component is expected to be released to the public in the second quarter. Additional proposals address performance enhancements for 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 achievement of particular milestones, rather than releasing the funds upfront. The voting process, which is open to roughly 1,000 elected delegates representing ADA holders, will commence on Tuesday and conclude on May 24. The outcome of this vote will provide insight into whether the Cardano governance structure treats Input Output as any other grant applicant or continues to approve its requests based on its historical significance to the project. Last year, Input Output's $97.5 million proposal was approved, but the governance landscape has evolved since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These changes have introduced alternatives to Input Output, which may influence the voting decisions. Furthermore, Input Output has highlighted the progress made 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 the network from $137.5 million to $142.7 million.