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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the community treasury compared to last year. The firm has submitted nine proposals amounting to $46.8 million for 2026, marking a notable reduction from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability to increase its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano's community treasury, which is funded by network fees, 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. 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. By the end of 2026, Input Output anticipates that smaller, specialized teams will take over most of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The proposals are divided into two main themes: scaling and Bitcoin DeFi integration. The first theme involves a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially reaching over 1,000 transactions per second. This would position Cardano competitively alongside other major blockchains like Solana and Ethereum's layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and is expected to be fully deployed by the end of the year. The second key proposal involves a system called Pogun, designed to bring Bitcoin-based decentralized finance to 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 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 providing upfront funding. The voting process, which opens on Tuesday and runs through May 24, will be decided by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will indicate whether Cardano's governance treats Input Output differently now that alternatives exist for grant funding and core software stewardship. Input Output also highlighted the progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.