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

Input Output, the company responsible for developing the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of what the company requested last year. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, which is funded by network fees, will be allocated based on votes from community representatives. Input Output has historically 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 annual funding requests, with the goal of becoming self-sufficient and allowing community funds to support 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 the work currently handled in-house. The proposals are divided into two main themes: scaling and Bitcoin DeFi. The first theme includes a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times. The second theme involves a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, allowing bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Other proposals cover performance improvements, security testing, developer tools, and expanded 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 the proposals will take place from Tuesday to May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. 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. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software, providing alternatives to Input Output and potentially influencing the voting outcome. Input Output has also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, and an increase in total assets deposited on the network.