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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury this year. The company has submitted nine proposals totaling $46.8 million for 2026, marking a decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring opportunities in Bitcoin DeFi. Cardano, similar to other major blockchains, has a communal fund that is fueled by network fees, and community representatives vote 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, the company is now aiming to reduce its reliance on community funding by decreasing its annual requests until it can sustain itself through its own revenue. This shift will allow community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects that smaller, specialized teams will take over a significant portion of its current in-house work. These teams include firms like VacuumLabs and Midgard Labs, which focus on specific aspects of the Cardano software. The nine proposals can be grouped into two main themes. 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 exceeding 1,000 transactions per second. For context, this upgrade 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, with full deployment expected by the end of the year. The second flagship proposal involves a system called Pogun, which aims to introduce Bitcoin-based decentralized finance to Cardano. 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 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 delivery milestones, rather than releasing funds upfront. This approach is similar to paying a contractor in stages as different parts of a project are completed, rather than providing the full budget at the start. Voting on these proposals will begin on Tuesday and will run through May 24. The decisions will be made by roughly 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 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 the governance landscape has shifted since then, with the Cardano Foundation taking over the project's grant-funding arm and Intersect assuming stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, which may influence the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano have also increased 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 alternatives to Input Output for funding development.