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

Input Output, the primary engineering company responsible for developing the Cardano blockchain, is seeking a substantially reduced amount of funding from the project's community treasury. The company has submitted nine proposals amounting to $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. Several proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and venturing into Bitcoin DeFi. Cardano, similar to other major blockchains, 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 employing engineers who develop the underlying software. The reduced funding request is part of a plan to decrease dependency on community funds, with the goal of Input Output sustaining itself through its own revenue. The company aims to gradually reduce its annual funding requests, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take on a significant portion of its current in-house work. The submitted proposals are grouped into two main themes: scaling and Bitcoin DeFi. A key proposal, Leios, aims to increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This would position Cardano as a competitive chain, comparable to Solana and the fastest Ethereum layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. Another proposal, Pogun, focuses on bringing Bitcoin-based decentralized finance to Cardano, enabling bitcoin holders to borrow and earn yield on their holdings without relying on centralized intermediaries. Pogun's lending component is expected to be released publicly in the second quarter. Smaller 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 delivery milestones, rather than providing upfront funding. Voting for the proposals is set to begin and 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 as any other grant applicant or continues to approve its requests based on deference. Last year's $97.5 million proposal was approved, but the governance landscape has shifted, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. Input Output has also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and an increase in total assets deposited on Cardano from $137.5 million to $142.7 million.