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

Input Output, the primary engineering company responsible for developing and maintaining the Cardano blockchain, is seeking a substantially reduced amount of funding from the project's treasury, marking a shift in its approach to development financing. The company has submitted nine proposals amounting to $46.8 million for the 2026 cycle, which is roughly half of the $97.5 million it requested in 2025. These proposals are geared towards enhancing Cardano's scalability to boost its transaction processing capacity and exploring opportunities in Bitcoin decentralized finance (DeFi). Cardano's governance model involves a community-managed treasury that allocates funds to development projects through a voting process. Historically, Input Output has been the largest recipient of these funds due to its significant role in building and maintaining the Cardano software. However, the company is now aiming to reduce its reliance on community funding, with plans to decrease its annual funding requests until it can become self-sustaining through its own revenue streams. This strategic shift is expected to pave the way for smaller, specialized teams to take on a more significant role in Cardano's development, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano ecosystem. The proposals submitted by Input Output are centered around two primary themes: scaling and DeFi integration. The first theme involves a consensus upgrade called Leios, designed to significantly increase Cardano's transaction processing capacity, potentially making it competitive with other major blockchains like Solana and Ethereum's layer-2 networks. Leios is anticipated to be released in test form by June, with a full deployment planned by the end of 2026. The second flagship proposal focuses on Pogun, a system intended to integrate Bitcoin-based DeFi into the Cardano ecosystem, enabling bitcoin holders to leverage their assets without relying on centralized intermediaries. Pogun's lending component is slated for public release in the second quarter. Additional proposals cover various improvements to Cardano's infrastructure, including its smart contract engine, security testing, developer tools, and API services. Each proposal is structured around specific delivery milestones, ensuring that funding is tied to tangible outcomes rather than being released upfront. The voting process, which commenced on Tuesday and will run through May 24, will be overseen by approximately 1,000 elected delegates known as DReps, who represent the interests of ADA holders. The outcome of this vote will be a crucial indicator of how Cardano's governance model treats Input Output's funding requests, particularly in light of recent changes that have introduced alternatives to Input Output for grant funding and core software development. Meanwhile, Input Output has highlighted the progress made within the Cardano ecosystem, including the launch of a new stablecoin, USDCx, which has seen significant adoption, and an increase in total assets deposited on the network.