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

Input Output, the private company responsible for building and maintaining 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 it requested in 2025. These proposals are focused on enhancing the scalability of the Cardano network to increase its transaction processing capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchain networks, has a communal treasury that is financed through network fees. The community votes on how to allocate these funds for development purposes. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. However, this reduced funding request marks the beginning of a plan to decrease Input Output's dependence on community funds. The company aims to gradually reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a wider range of smaller, specialized engineering groups. By the end of 2026, Input Output anticipates that smaller teams, such as VacuumLabs and Midgard Labs, will take over most of the in-house work, including specific layers of the Cardano software. The proposals are categorized into two primary themes: scaling and Bitcoin DeFi. A significant portion of the funds will be allocated to 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 is scheduled for a test release in June and full deployment by the end of the year. The second major proposal involves a system called Pogun, designed to bring Bitcoin-based decentralized finance to the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. The lending component of Pogun is expected to be released to the public in the second quarter. Additionally, smaller proposals focus on improving the performance of Cardano's smart contract engine, enhancing security testing infrastructure, developing tools for developers, and expanding API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, rather than providing the funds upfront. Voting on these proposals began on Tuesday and will continue until May 24. The decisions will be made by 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 to make a direct appeal to these delegates. The outcome of this vote will determine whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. 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 the core Cardano software. These changes mean that alternatives to Input Output now exist, which may influence the voting outcome. Input Output also highlighted progress within the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how the Cardano community's perspective has shifted, now that there are alternatives to Input Output for funding development.