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 treasury this year. The company has submitted nine proposals totaling $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 increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano's community treasury, which is funded 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 developing the blockchain's underlying software. However, the company now aims to reduce its dependence on community funding by decreasing its annual requests until it can sustain itself 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 over most of its current in-house work. The nine proposals can be grouped into two main themes: scaling and Bitcoin DeFi integration. One of the key proposals is for a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. This upgrade would significantly enhance Cardano's competitiveness with other major blockchains like Solana and Ethereum. Leios is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal is for a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. This system would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover improvements to 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 that funds are released in stages as different parts of the project are completed. Voting on these proposals will begin on Tuesday and run through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. The outcome of the vote will be a significant test of Cardano's governance, particularly in how it treats Input Output's requests compared to other grant applicants. Last year, Input Output's $97.5 million proposal was approved, but the governance structure has evolved since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, potentially altering how the community approaches funding decisions. Input Output has also highlighted progress within the Cardano ecosystem, including the launch of a new 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 outcome of the vote will signal how the Cardano community's perspective has shifted, particularly in terms of funding development without relying on Input Output.