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

Input Output, the primary developer of the Cardano blockchain, is seeking a substantially lower amount of funding from the community treasury for 2026. The company has submitted nine proposals amounting to $46.8 million, which marks a notable reduction from the $97.5 million requested in 2025. Key proposals focus on enhancing Cardano's scalability to boost transaction capacity and exploring Bitcoin decentralized finance (DeFi) opportunities. Cardano, similar to other major blockchain networks, operates a communal fund fueled by network fees. This fund is allocated through a voting process by community representatives. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the blockchain's underlying software. This reduced funding request represents the first concrete step in a strategic plan to decrease Input Output's dependency on community funds. The company aims to gradually reduce its annual funding requests until it can operate sustainably on its own revenue. This shift would enable community funds to support a broader range of smaller, specialized engineering teams. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will undertake a significant portion of the development work currently handled in-house. These teams specialize in specific aspects of the Cardano software. The proposals are categorized into two primary themes: scaling and Bitcoin DeFi. A significant proposal is the Leios consensus upgrade, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade aims to achieve over 1,000 transactions per second, positioning Cardano competitively with 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. Another key proposal involves the Pogun system, designed to introduce Bitcoin-based DeFi to the Cardano ecosystem. Pogun would allow bitcoin holders to borrow and earn yield on their bitcoin without needing to rely on a centralized intermediary. The lending component of Pogun is targeted for public release in the second quarter of 2026. Smaller proposals address performance enhancements for 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. Voting on these proposals commences on Tuesday and will run through May 24. The decision-making process involves 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, directly addressing these delegates to make the case for the proposals. The outcome of the vote will be a significant test of Cardano's governance model, which has expanded substantially over the past two years. It will indicate whether the governance structure treats Input Output similarly to other grant applicants or if it continues to approve requests based on historical deference. Last year, Input Output's $97.5 million proposal was approved. However, since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization overseeing this vote, has assumed stewardship of the core Cardano software. These changes mean that alternatives to Input Output now exist, which could influence the voting outcome. In addition to the funding proposals, Input Output highlighted progress within the ecosystem. A new Cardano stablecoin, USDCx, has seen significant adoption, with 14.6 million tokens in circulation just weeks after its launch. The total assets deposited on Cardano have also increased, rising from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the proposals are fully approved, partially funded, or significantly altered by the DReps, will provide insight into the Cardano community's current perspective, especially now that mechanisms for funding development beyond Input Output are in place.