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

Input Output, the 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, which marks a considerable reduction from its request of $97.5 million in 2025. These proposals primarily focus on enhancing Cardano's scalability and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchains, operates a communal fund that is fueled by network fees. This fund is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of this funding due to its significant role in developing the blockchain's underlying software. The reduced funding request is part of a broader 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. This shift will enable community funds to support a wider range of smaller, specialized engineering groups. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will take over a significant portion of its current in-house work. These teams will focus on specific aspects of the Cardano software. The proposals submitted by Input Output can be categorized into two main themes: scaling and Bitcoin DeFi. A major proposal is the funding of Leios, a consensus upgrade that is expected to increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade aims to process over 1,000 transactions per second, making Cardano competitive with other fast blockchain networks like Solana and Ethereum's layer-2 networks. Leios is scheduled for a test release in June, with full deployment expected by the end of the year. Another significant proposal is the funding of Pogun, a system designed to introduce Bitcoin-based decentralized finance to Cardano. This system will allow Bitcoin holders to borrow and earn yield on their holdings without relying on a centralized intermediary. The lending component of Pogun is expected to be released publicly in the second quarter. Other proposals include 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 delivery milestones, rather than releasing funds upfront. Voting on these proposals will commence on Tuesday and will be open until May 24. The decisions will be made 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 test of 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. Last year's proposal of $97.5 million 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, which may influence the voting outcome. 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, the total assets deposited on Cardano have increased from $137.5 million to $142.7 million. The outcome of the vote will signal how the Cardano community's perspective has shifted, now that there are alternatives to Input Output for funding development.