Cardano Developer Seeks 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 lower amount of funding from the project's treasury this year. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a notable reduction 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, similar to other major blockchains, operates a community-funded treasury that is allocated through a voting process. Input Output has historically been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company is now taking steps to reduce its dependency on community funding, aiming to decrease its annual requests until it can sustain itself through its own revenue. This shift will enable community funds to support a more diverse range of engineering groups. By the end of 2026, Input Output expects smaller, specialized teams to take over much of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals submitted by Input Output can be broadly categorized into two themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated towards a consensus upgrade called Leios, which is expected to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other leading blockchains like Solana and Ethereum layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another key proposal involves the development of Pogun, a system designed to integrate Bitcoin-based decentralized finance into the Cardano ecosystem. This would allow bitcoin holders to leverage their assets on Cardano without relying on centralized intermediaries. Pogun's lending component is set to be released publicly in the second quarter. Additional proposals cover various improvements to Cardano's infrastructure, including its smart contract engine, security testing, developer tools, and API services. Each proposal outlines specific delivery milestones and ties funding to the achievement of these milestones, rather than providing upfront funding. 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 be a significant indicator of how Cardano's governance treats Input Output's funding requests, particularly in light of the project's expanded governance structure and the emergence of alternatives to Input Output. The Cardano ecosystem has also seen notable progress, with the recent launch of a new stablecoin, USDCx, reaching 14.6 million tokens in circulation within weeks, and total assets deposited on the network increasing from $137.5 million to $142.7 million.