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 substantially smaller portion of the project's community treasury funding for 2026. The company has submitted nine proposals amounting to $46.8 million, marking a notable reduction from its $97.5 million request in 2025. These proposals primarily focus on enhancing Cardano's scalability to boost its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchain networks, relies on a communal fund fueled by network fees, which is allocated through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying blockchain software. However, the company is now aiming to decrease its dependency on community funding by reducing its annual requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller, specialized engineering teams. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will take over a significant portion of its current in-house work, focusing on specific aspects of the Cardano software. The submitted proposals are centered around two main themes: scaling and Bitcoin DeFi. A key proposal is the development of Leios, a consensus upgrade designed to significantly increase Cardano's transaction processing capacity, potentially reaching over 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 significant proposal is Pogun, a system aimed at introducing Bitcoin-based decentralized finance to the Cardano ecosystem. This would enable bitcoin holders to borrow and earn yield on their holdings directly through Cardano, without the need for a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter of the year. Additional proposals cover various improvements, including enhancements 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 achievement of delivery milestones, rather than providing upfront funding. The voting process, which began on Tuesday and will run through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will be a significant test of Cardano's governance system, particularly in how it treats Input Output's funding requests. Last year, Input Output's $97.5 million proposal was approved, but the governance landscape has since evolved, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted recent 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 a shift in the Cardano community's approach to funding development, potentially marking a new era in the project's governance and development strategy.