Cardano Developer Requests 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 firm has submitted nine proposals totaling $46.8 million for 2026, marking a notable decrease from the $97.5 million requested in 2025. The proposals primarily focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's treasury is a shared fund fueled by network fees, which are 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. However, the company now aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This strategic shift is expected to enable smaller, specialized teams to take on a larger share of the development work, including firms like VacuumLabs and Midgard Labs. The proposals are divided into two main themes: scaling and Bitcoin DeFi. The most substantial proposal supports the development of Leios, a consensus upgrade designed to significantly boost Cardano's transaction processing capacity, potentially increasing it by 10 to 65 times. This upgrade is slated for a test release in June and full deployment by the end of the year. Another key proposal focuses on Pogun, a system aimed at integrating Bitcoin-based decentralized finance into Cardano, allowing bitcoin holders to lend and earn yields on their assets without relying on centralized intermediaries. Smaller proposals address performance enhancements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as different components are completed. The voting process, which opened on Tuesday and will run through May 24, will be overseen by approximately 1,000 elected delegates representing 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 its historical significance to the project. The Cardano Foundation's takeover of the project's grant-funding arm and Intersect's assumption of core software stewardship have introduced alternatives to Input Output, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the growth of total assets deposited on Cardano from $137.5 million to $142.7 million.