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 amounting to $46.8 million for 2026, marking a notable reduction from its $97.5 million request in 2025. The proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring opportunities in Bitcoin DeFi. Cardano's community treasury, which is funded by network fees, is allocated through a voting process. Historically, Input Output has been the primary recipient of these funds due to its significant role in developing the blockchain's underlying software. However, the company is now taking steps to reduce its dependence on community funding. Input Output aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, the company expects smaller, specialized teams to take over a significant portion of its current in-house work. The nine proposals can be grouped into two main categories. The first focuses on a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade aims to make Cardano more competitive with other major blockchains, such as Solana and Ethereum's layer-2 networks. Leios is scheduled for a test release in June and is expected to be fully deployed by the end of the year. The second key proposal involves a system called Pogun, which aims to integrate Bitcoin-based decentralized finance into Cardano. This system would enable 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. The remaining proposals address performance 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 delivery milestones, rather than providing upfront funding. The voting process, which is open to roughly 1,000 elected delegates representing ADA holders, will begin on Tuesday and conclude on May 24. 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 role in the project. Last year's $97.5 million proposal was approved, but the governance structure has undergone significant changes 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 shifts have created alternatives to Input Output, which may influence 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. The total assets deposited on Cardano have increased from $137.5 million to $142.7 million. The outcome of the vote will signal the Cardano community's willingness to support Input Output's reduced funding request and its vision for the project's future development.