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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is requesting roughly half the funding it sought 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, with a focus on enhancing the network's scalability and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a communal fund fueled by network fees, which is allocated by community representatives through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in developing the underlying software. The reduced funding request marks the first step in a plan to reduce Input Output's dependence on community funds. The company aims to decrease its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output anticipates that smaller, specialized teams, such as VacuumLabs and Midgard Labs, will take over most of the in-house work, focusing on specific layers of the Cardano software. The proposals are grouped into two primary themes: scaling and Bitcoin DeFi. The largest funding allocation is for the Leios consensus upgrade, 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 funds the Pogun system, which aims to integrate Bitcoin-based decentralized finance into Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on a centralized intermediary. The lending component of Pogun is expected to be released publicly in the second quarter. Smaller proposals focus on enhancing the performance of 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, rather than releasing funds upfront. Voting on the proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. The founder of Input Output, Charles Hoskinson, is scheduled to release a video this week, making a direct appeal to these delegates. 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 the core Cardano software, providing alternatives to Input Output. 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 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, given the availability of tools to fund development without relying on Input Output.