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

Input Output, the primary developer of the Cardano blockchain, is seeking a substantially lower amount of funding from the project's community treasury for 2026. The company has submitted nine proposals, totaling $46.8 million, which is roughly half of the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring Bitcoin DeFi opportunities. The Cardano network, similar to other major blockchains, has a community-managed treasury that allocates funds for development based on voting by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in building and maintaining the Cardano software. However, the company aims to reduce its dependency on community funding by gradually decreasing its annual requests until it can sustain itself through its own revenue. This plan involves community funds being redirected to support a more diverse range of smaller engineering teams. By the end of 2026, Input Output anticipates that specialized teams, such as VacuumLabs and Midgard Labs, will take over a significant portion of the development work currently handled in-house. The proposals submitted by Input Output can be categorized into two main themes: scaling and Bitcoin DeFi integration. A key proposal is the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade would position Cardano competitively with other leading blockchains like Solana and Ethereum's layer-2 networks in terms of throughput. Leios is slated for a test release in June, with full deployment expected by the end of the year. Another significant proposal involves the development of Pogun, a system designed to introduce Bitcoin-based decentralized finance (DeFi) to the Cardano ecosystem. This would enable Bitcoin holders to borrow and earn yield on their Bitcoin holdings directly through Cardano, without the need for a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter of 2026. Other proposals cover various improvements, including enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal outlines specific delivery milestones and names the leads responsible for their execution, with funding tied to the achievement of these milestones rather than being released upfront. The voting process, which is open to roughly 1,000 elected delegates known as DReps who represent ADA holders, will run from Tuesday through May 24. The outcome of this vote will be a significant test of Cardano's governance model, particularly in how it treats Input Output's funding requests now that alternative development paths and governance structures are in place. Last year, Input Output's $97.5 million proposal was approved, but the landscape has changed 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 have a more defined role in the ecosystem. Additionally, Input Output highlighted the progress within the Cardano ecosystem, including the launch of a new stablecoin, USDCx, which has seen 14.6 million tokens in circulation, and an increase in total assets deposited on the network from $137.5 million to $142.7 million. The fate of Input Output's proposals, whether they are fully funded, partially funded, or significantly altered by the DReps, will provide insight into the evolving dynamics within the Cardano community and its approach to development funding.