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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking to secure a substantially lower amount of funding from the project's treasury, marking a notable shift in its approach. The company has submitted nine proposals totaling $46.8 million for the 2026 funding cycle, which represents a decrease of approximately 52% 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's treasury, which is funded by network fees, is allocated through a voting process by community representatives. 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 now aims to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This change in strategy is designed to enable community funds to support a broader 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, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals submitted by Input Output can be grouped into two main categories. The first involves a consensus upgrade called Leios, which is designed to significantly increase Cardano's transaction processing capacity, potentially by 10 to 65 times, with a target of over 1,000 transactions per second. This upgrade would position Cardano as a more competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. The second key proposal involves a system called Pogun, aimed at integrating Bitcoin-based decentralized finance into Cardano. This system would allow Bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to rely on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other 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 the achievement of delivery milestones, rather than providing upfront funding. This approach is akin to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the outset. 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 be an important test of Cardano's governance, particularly in how it treats Input Output's requests in comparison to other grant applicants. Last year, Input Output's $97.5 million proposal was approved, but the governance landscape has evolved significantly since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not previously, potentially influencing the voting outcome. Additionally, Input Output 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 significantly altered by the DReps, will signal a shift in the Cardano community's approach to development funding, especially now that tools exist to support development beyond Input Output.