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

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking approximately half the funding it requested 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. These proposals focus on scaling Cardano to increase its transaction capacity and expanding into Bitcoin DeFi. Cardano, like other major blockchains, has a shared pool of funds allocated by network fees, which are voted on by community representatives for development work. Input Output has historically 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 decreasing its annual requests until it can sustain itself on its own revenue. By the end of 2026, Input Output expects smaller teams to take on most of its current in-house work, including firms like VacuumLabs and Midgard Labs that specialize in specific layers of the Cardano software. The nine proposals are grouped into two main themes: scaling and Bitcoin DeFi. The largest proposal funds a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times, allowing for over 1,000 transactions per second. This would make Cardano competitive with other fast Ethereum layer-2 networks and Solana in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second major proposal funds a system called Pogun, which aims to bring 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 performance improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal has specific delivery leads and ties funding to delivery milestones rather than releasing the funds upfront. Voting for these proposals opens on Tuesday and runs through May 24, with decisions made by roughly 1,000 elected delegates known as DReps, who represent ADA holders. 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 core Cardano software. These changes mean that alternatives to Input Output now exist, which may impact 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. Total assets deposited on Cardano have risen 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 thinking has shifted now that there are tools to fund development without Input Output.