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

Input Output, the engineering company responsible for developing the Cardano blockchain, is seeking approximately half the funding it requested in the previous year from the project's community treasury. The company submitted nine proposals totaling $46.8 million for 2026, marking a significant reduction from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, maintains a shared fund fueled by network fees, which community representatives vote to allocate toward development projects. Historically, Input Output has been the largest recipient of these funds due to its significant role in building the underlying software. However, the reduced funding request is part of a plan to decrease dependency on community funds, aiming for the company to become self-sustainable through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. The most substantial funding is allocated to the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This upgrade would position Cardano as a competitive chain, rivaling Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second significant proposal supports the development of Pogun, a system designed to introduce Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is planned for public release in the second quarter. Additional proposals cover 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, ensuring a staged release of funds based on project progress. Voting on these proposals commenced on Tuesday and will continue through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. 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 historical 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, introducing alternatives to Input Output. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The vote's outcome will signal the shift in the Cardano community's perspective on funding development, now that alternatives to Input Output exist.