Cardano Developer Seeks Reduced Funding for Expansion and DeFi Integration

Input Output, the private company responsible for building and maintaining the Cardano blockchain, is seeking a substantially reduced amount of funding from the community treasury for 2026. The company has submitted nine proposals totaling $46.8 million, which is roughly half of 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, fueled 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 dependency on community funds annually, with the goal of becoming self-sustaining through its own revenue. By the end of 2026, Input Output expects smaller, specialized teams to undertake a significant portion of its current in-house work, including collaborations with firms like VacuumLabs and Midgard Labs that focus on specific layers of the Cardano software. The proposals are categorized into two primary themes: scaling and Bitcoin DeFi integration. The most substantial funding is allocated to the Leios consensus upgrade, which Input Output claims will enhance Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 1,000 transactions per second. This upgrade is slated for a test release in June and full deployment by the end of the year. The second major proposal involves the development of Pogun, a system designed to introduce 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 a centralized intermediary. Pogun's lending component is expected to be released publicly in the second quarter. Additional proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal is tied to specific delivery milestones and leads, ensuring that funding is released in stages upon completion of project components. Voting on these proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates representing ADA holders. The outcome of this vote will indicate whether Cardano's governance 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, 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, providing alternatives to Input Output. 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 an increase in total assets deposited on Cardano from $137.5 million to $142.7 million. The result of the vote will signal the shift in the Cardano community's perspective on funding development, now that alternatives to Input Output are available.