Cardano Developer Requests 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 for 2026. The company has submitted nine proposals, totaling $46.8 million, which is roughly half of the $97.5 million requested in 2025. These proposals focus on scaling the Cardano network to enhance its transaction capacity and exploring the integration of Bitcoin-based decentralized finance (DeFi) solutions. Cardano's treasury is a shared fund fueled by network fees, with community representatives voting on how to allocate these funds for development purposes. Historically, Input Output has been the primary recipient of these funds due to its significant role in building and maintaining the Cardano software. However, the company aims to reduce its dependency on community funding over time, with plans to decrease its annual funding requests until it can become self-sustaining through its own revenue. The proposals submitted by Input Output for 2026 can be broadly categorized into two main themes: scaling the network and DeFi integration. One of the key proposals is for a consensus upgrade called Leios, which promises to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other major blockchain networks like Solana and Ethereum's layer-2 networks. Another significant proposal is for a system called Pogun, designed to facilitate Bitcoin-based DeFi on the Cardano network, allowing bitcoin holders to lend and earn interest on their holdings without relying on centralized intermediaries. In addition to these major proposals, Input Output has also submitted several smaller proposals aimed at improving the performance of Cardano's smart contract engine, enhancing security testing infrastructure, developing more robust developer tools, and expanding API services. Each proposal outlines specific delivery milestones and ties funding to the achievement of these milestones, ensuring a more transparent and performance-based allocation of community funds. The voting process for these proposals is scheduled to take place from Tuesday through May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions on behalf of ADA holders. The outcome of this vote will not only determine the future trajectory of Cardano's development but also serve as a test of the project's governance model, particularly in how it treats Input Output's funding requests in comparison to other grant applicants. The Cardano ecosystem has seen notable progress, with the recent launch of a new stablecoin, USDCx, reaching 14.6 million tokens in circulation and total assets deposited on the network increasing from $137.5 million to $142.7 million. The results of the vote will provide insight into how the Cardano community's perception of Input Output's role in the project's development has evolved, especially with the emergence of alternative entities capable of contributing to the network's growth and maintenance.