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

Input Output, the private company responsible for developing 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 notable reduction from the $97.5 million requested in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, maintains a communal fund fueled by network fees, which is allocated towards development projects through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in building the 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. By the end of 2026, Input Output expects smaller, specialized teams to assume most of its current responsibilities, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The submitted proposals are categorized into two main themes: scaling and Bitcoin DeFi. A key proposal involves the Leios consensus upgrade, which promises to increase Cardano's transaction processing capacity by 10 to 65 times, aiming for over 1,000 transactions per second. This would elevate Cardano's performance to be competitive with Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is slated for a test release in June and full deployment by the end of the year. Another significant proposal is for a system called Pogun, designed to introduce Bitcoin-based decentralized finance to Cardano. This system would allow bitcoin holders to borrow and earn yield on their holdings through Cardano without needing a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover improvements 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 the achievement of milestones rather than providing the funds upfront. Voting on these proposals opens on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of this vote will indicate whether Cardano's governance treats Input Output similarly to other grant applicants or if it continues to approve its requests based on historical deference. Last year, Input Output'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 impacting the voting outcome. Input Output also highlighted progress within the ecosystem, 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 fate of the proposals, whether they are fully funded, partially funded, or modified, will signal a shift in the Cardano community's approach to development funding, now that mechanisms exist to support development beyond Input Output.