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

Input Output, the company responsible for developing 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, down from $97.5 million in the previous year. The proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. This reduction in funding request is part of Input Output's plan to gradually decrease its reliance on community funds and become self-sustaining through its own revenue. The company aims to achieve this by outsourcing work to smaller, specialized teams, such as VacuumLabs and Midgard Labs, which will handle specific aspects of the Cardano software. The proposals are divided 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 it to compete with other major blockchains like Solana and Ethereum. The Leios upgrade is scheduled for a test release in June and full deployment by the end of the year. The second theme involves a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Other proposals cover performance improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal has specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different parts of the project are completed. The voting process, which opens on Tuesday and runs through May 24, will be decided by roughly 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization running this vote, has assumed stewardship of core Cardano software, providing alternatives to Input Output. Input Output has also reported progress in 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, rising from $137.5 million to $142.7 million.