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 totaling $46.8 million for 2026, marking a considerable reduction from its $97.5 million request in 2025. The proposals primarily focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's treasury, which is funded by network fees, 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. However, the company now aims to gradually decrease its reliance on community funding by reducing its annual requests until it can sustain itself through its own revenue. This shift will enable 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 submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi. The first theme involves a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. This upgrade is slated for a test release in June and full deployment by the end of the year. The second flagship proposal involves a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to Cardano. This system will enable bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. Pogun's lending component is expected to be released publicly in the second quarter. Other 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, ensuring that funds are released in stages as different components are completed. Voting on these proposals is scheduled to take place from Tuesday until May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of this vote will test 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 the core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact the voting outcome. Input Output has also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, given the availability of tools to fund development without relying on Input Output.