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

The company behind the Cardano blockchain, Input Output, is seeking a substantially lower amount of funding from the community treasury this year, submitting nine proposals that total $46.8 million. This marks a notable decrease from the $97.5 million requested in 2025. The proposals are focused on enhancing Cardano's scalability to increase its transaction capacity and exploring the integration of Bitcoin DeFi. Cardano, similar to other major blockchain networks, has a communal fund that is financed by network fees, with community representatives voting on how to allocate these funds for development purposes. Historically, Input Output has been the primary recipient of these funds due to its significant role in building and maintaining the underlying blockchain software. However, the reduced funding request is part of a broader plan to gradually decrease Input Output's dependence on community funding. The company's goal is to reduce its annual funding requests until it can sustain itself through its own revenue, allowing community funds to support a more diverse 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 a significant portion of the development work currently handled in-house. These teams will focus on specific aspects of the Cardano software. The proposals submitted by Input Output can be grouped into two primary themes: scaling and Bitcoin DeFi. A significant portion of the funding is allocated to a consensus upgrade known as Leios, 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, with full deployment expected by the end of the year. For context, the successful implementation of Leios would position Cardano as a competitive force in the blockchain space, rivaling the transaction throughput of Solana and the fastest Ethereum layer-2 networks. The second key proposal is for a system called Pogun, designed to introduce Bitcoin-based decentralized finance to the Cardano ecosystem. This system would enable bitcoin holders to borrow and earn yield on their holdings without having to rely on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Smaller proposals cover a range of improvements, including 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 the achievement of delivery milestones, rather than providing the funds upfront. Voting on these proposals is set to begin and will run through May 24, with the decisions being made by approximately 1,000 elected delegates, known as DReps, who represent ADA holders. Charles Hoskinson, the founder of Input Output, is expected to release a video addressing the delegates directly. The outcome of the vote will be a significant test of Cardano's governance system, which has undergone substantial expansion over the past two years. It will determine whether Input Output is treated similarly to other grant applicants or if its requests continue to be approved largely out of deference. Last year, Input Output's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization overseeing this vote, has assumed responsibility for the core Cardano software. These changes mean that alternatives to Input Output now exist in a way they did not during previous votes. Input Output also highlighted progress within the ecosystem, noting that a new Cardano stablecoin, USDCx, has reached 14.6 million tokens in circulation just weeks after its launch. Additionally, the total assets deposited on Cardano have increased from $137.5 million to $142.7 million over the same period. The outcome of the vote, whether the full slate of proposals is approved, partially funded, or significantly altered by the DReps, will signal a shift in the Cardano community's approach to development funding, especially now that mechanisms exist to support development beyond Input Output.