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

Input Output, the company responsible for developing the Cardano blockchain, is seeking a substantially lower amount of funding from the project's treasury, aiming to reduce its dependence on community funds. The company has submitted nine proposals totaling $46.8 million for 2026, a notable decrease from the $97.5 million requested in 2025. These proposals focus on enhancing Cardano's scalability and exploring Bitcoin DeFi opportunities. Cardano's community treasury, fueled by network fees, is allocated through a voting process, with Input Output historically being the largest recipient due to its significant role in the blockchain's development. The reduced funding request is a step towards Input Output's goal of becoming self-sufficient, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output anticipates that specialized teams, such as VacuumLabs and Midgard Labs, will take over most of its in-house work. The proposals are divided into two primary themes: scaling and Bitcoin DeFi. The first theme includes a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially surpassing 1,000 transactions per second. This would position Cardano as a competitive player alongside 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. The second flagship proposal involves a system called Pogun, designed to introduce 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 targeted for public release in the second quarter. Smaller proposals focus on improving Cardano's smart contract engine, security testing infrastructure, developer tools, and expanding API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, ensuring a staged release of funds based on progress. Voting, which opened on Tuesday and will run through May 24, 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 like any other grant applicant or continues to approve its requests based on its historical significance. The Cardano Foundation's takeover of the project's grant-funding arm and Intersect's assumption of core Cardano software stewardship have introduced alternatives to Input Output, potentially influencing the voting outcome. Input Output also highlighted ecosystem progress, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation, and the increase in total assets deposited on Cardano from $137.5 million to $142.7 million.