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

Input Output, the primary engineering company responsible for the development of the Cardano blockchain, is requesting approximately half of the funding it sought last year from the project's treasury. The company has submitted nine proposals amounting to $46.8 million for 2026, down from $97.5 million in the previous year. Several proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, maintains a shared fund fueled by network fees, which 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 blockchain's underlying software. The reduced funding request marks the first step towards reducing Input Output's dependence on community funds. The company aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing 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 are grouped into two main themes: scaling and Bitcoin DeFi. The larger proposals fund a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. Leios is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal supports a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is set for public release in the second quarter. Smaller proposals cover performance 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 delivery milestones rather than releasing funds upfront. Voting is scheduled to open and will run through May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome of the vote will determine whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. Last year's $97.5 million proposal was approved, but since then, 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. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks, and a rise in total assets deposited on Cardano from $137.5 million to $142.7 million. The outcome of the vote will signal the shift in the Cardano community's perspective on funding development without relying on Input Output.