Developers of Cardano request reduced allocation from massive $46.8 million pool to enhance capacity and integrate Bitcoin into decentralized finance ecosystem.
In a significant shift, Input Output, the driving force behind the Cardano blockchain, is scaling back its funding requests from the project's communal treasury. On Tuesday, the company submitted a package of nine proposals valued at $46.8 million for the year 2026, marking a substantial decrease from the $97.5 million sought in 2025. This downsizing reflects a strategic effort to wean the company off community funds and transition towards self-sufficiency.
The Cardano network, like its peers, operates a shared fund fueled by transaction fees, which is allocated by community representatives to support development initiatives. Historically, Input Output has been the primary beneficiary of this funding due to its significant role in building and maintaining the blockchain's underlying infrastructure. However, the company now intends to gradually reduce its reliance on community funds, aiming to become financially independent and enable smaller, specialized engineering teams to contribute to the ecosystem.
The proposed funding will be allocated across two primary themes: enhancing the blockchain's scalability and expanding into Bitcoin-based decentralized finance (DeFi). A key proposal, dubbed Leios, promises to boost Cardano's transaction processing capacity by a factor of 10 to 65, potentially exceeding 1,000 transactions per second. This upgrade, slated for testing in June and full deployment by the end of the year, could catapult Cardano into the same league as Solana and Ethereum's fastest layer-2 networks in terms of throughput.
Another flagship proposal, Pogun, aims to integrate Bitcoin-based DeFi capabilities into the Cardano ecosystem, allowing bitcoin holders to borrow and earn yield on their assets without relying on centralized intermediaries. The lending component of Pogun is expected to be released publicly in the second quarter of the year.
In addition to these major proposals, Input Output has also submitted smaller requests focused on improving the performance of Cardano's smart contract engine, security testing infrastructure, developer tools, and API services. Notably, each proposal is tied to specific delivery milestones, ensuring that funding is released in stages as project components are completed, rather than upfront.
The fate of these proposals will be decided through a voting process, which commenced on Tuesday and will run until May 24. The decisions will be made by approximately 1,000 elected delegates, known as DReps, who represent the interests of ADA holders. Input Output's founder, Charles Hoskinson, is scheduled to release a video this week, making a direct appeal to these delegates.
The outcome of this vote will serve as a litmus test for Cardano's governance framework, which has undergone significant expansion over the past two years. It will be interesting to see whether the community treats Input Output as just another grant applicant or continues to approve its requests based on historical deference. The Cardano ecosystem has also seen recent progress, with a new stablecoin, USDCx, reaching 14.6 million tokens in circulation and total assets deposited on the network increasing from $137.5 million to $142.7 million.
Ultimately, the voting results will signal a shift in the community's mindset, as alternatives to Input Output have emerged, and the tools to fund development independently are now available. The vote's outcome will determine whether Input Output's proposals are fully funded, partially approved, or reshaped entirely, reflecting the evolving dynamics of the Cardano ecosystem.