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

Input Output, the company responsible for developing the Cardano blockchain, is seeking approximately half the funding it requested in the previous year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025. Several proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring Bitcoin DeFi opportunities. Cardano, like other major blockchains, maintains a shared fund fueled by network fees, which community representatives vote to allocate towards development work. Input Output has historically been the largest recipient of these funds due to its significant role in building the underlying software. However, the reduced funding request marks the first concrete step in a plan to decrease dependency on community funds. Input Output now aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller, specialized teams to take on most of its current in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The nine proposals can be grouped into two main themes. The first theme involves a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, targeting over 1,000 transactions per second. This upgrade would significantly enhance Cardano's competitiveness with other blockchains like Solana and 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. The second flagship proposal involves a system called Pogun, which aims to integrate Bitcoin-based decentralized finance into Cardano. This would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. Pogun's lending component is targeted for public release in the second quarter. Smaller proposals cover performance 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 rather than releasing funds upfront. Voting on these proposals opens on Tuesday and will run through May 24, with decisions made by roughly 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. Last year's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software. These shifts mean that alternatives to Input Output now exist, which could impact the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. Total assets deposited on Cardano rose from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's perspective has shifted now that there are tools to fund development without relying on Input Output.