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

Input Output, the company responsible for developing the Cardano blockchain, is requesting approximately half of the funding it sought last 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 the previous year. These proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring Bitcoin DeFi opportunities. Cardano, similar to other major blockchains, has a shared fund fueled by network fees, which community representatives allocate for development work through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in building the underlying software. However, the company now aims to reduce its dependency on community funds by gradually decreasing its annual funding requests until it can sustain itself through its own revenue. This will allow community funds to support a broader range of smaller engineering teams. By the end of 2026, Input Output expects smaller teams, such as VacuumLabs and Midgard Labs, to take on a substantial portion of its current in-house work. The submitted proposals are centered around two primary themes: scaling and Bitcoin DeFi. The largest proposal funds the Leios consensus upgrade, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, potentially exceeding 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 supports the development of Pogun, a system designed to bring Bitcoin-based decentralized finance to Cardano. This system will 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. Smaller proposals address performance enhancements 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, ensuring a staged release of funds based on progress. Voting on these proposals will commence on Tuesday and conclude on May 24, with roughly 1,000 elected delegates, known as DReps, making the decisions. The outcome of this vote will indicate whether Cardano's governance treats Input Output as 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 have introduced alternatives to Input Output, potentially influencing the voting outcome. Input Output has also highlighted 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 outcome of the vote will signal the Cardano community's willingness to support Input Output's proposals and its vision for the project's future development.