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

The company behind the Cardano blockchain is seeking a reduced funding allocation from the project's community treasury. Input Output submitted nine proposals totaling $46.8 million for 2026, marking a substantial decrease from the $97.5 million requested in 2025. The proposals primarily focus on scaling the Cardano network to enhance its transaction processing capacity and expanding into the Bitcoin DeFi ecosystem. Cardano maintains a shared fund, fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company now aims to reduce its dependency on community funds by decreasing its annual funding requests until it can sustain itself through its own revenue. The proposals are categorized into two main themes: scaling and Bitcoin DeFi. A key proposal is the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially reaching over 1,000 transactions per second. This upgrade is scheduled for a test release in June and full deployment by the end of the year. Another significant proposal is the Pogun system, designed to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system will enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Additional proposals cover 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 delivery milestones, ensuring a staged release of funds based on progress. The voting process, which opens on Tuesday and runs through May 24, will be overseen by roughly 1,000 elected delegates known as DReps, representing ADA holders. 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 significance in the project. The Cardano ecosystem has shown progress, with a new stablecoin, USDCx, reaching 14.6 million tokens in circulation shortly after its launch. The total assets deposited on Cardano have also increased from $137.5 million to $142.7 million. The vote's outcome will signal the Cardano community's shifting perspective on funding development, now that alternatives to Input Output exist.