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 community treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a notable reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a shared fund that is fueled by network fees and 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 underlying software. However, this reduced funding request is part of a strategic plan to decrease Input Output's dependency on community funds. The company aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller engineering teams. By the end of 2026, Input Output expects that smaller, specialized teams will undertake most of the work currently handled in-house. This includes firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The proposals are grouped into two main themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated to a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade is scheduled for a test release in June and is expected to be fully deployed by the end of the year. Another key proposal is for a system called Pogun, designed to bring 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. The lending component of Pogun is targeted for public release in the second quarter. The remaining 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 leads and ties funding to delivery milestones, ensuring a staged release of funds based on the completion of project components. The voting process, which begins on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is scheduled to release a video this week to make a direct appeal to these delegates. The outcome of the vote will be a significant test of Cardano's governance, particularly in how it treats Input Output's funding requests. 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, potentially altering the voting dynamics. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation. Additionally, total assets deposited on Cardano have increased from $137.5 million to $142.7 million. The outcome of the vote, whether the full slate is approved, partially funded, or reshaped, will signal a shift in the Cardano community's approach to funding development, now that tools to support development without Input Output are available.