How Cardano Foundation voted on Withdraw 120,000,000 ada for AlphaGrowth’s Cardano PRIME

The Cardano Foundation votes YES. This proposal seeks to bridge Cardano’s DeFi liquidity gap and we believe this programme, as described in the metadata and the additional commitments made publicly, will support resilient growth of TVL.

A PDF version of this rationale is also made available.

The problem PRIME targets is evident: Cardano has been adding capital-ready rails without converting them into retained liquidity or application depth.

Our YES rests on the programme's structure rather than on its headline target. Our decision is driven by the following factors:

1. Gated release limits near-term exposure: Roughly 90 million ada sits behind a Month 4, Phase 3 release gate requiring an affirmative Operating Group decision, leaving ungated near-term exposure of approximately 30 million ada. Six return-to-treasury triggers cover unused, unearned, and unreleased funds.
2. Separation of recommendation, oversight, and custody: AlphaGrowth produces analyses and disbursement memos, the Operating Group may veto or condition material actions, and Intersect administers the funds through the audited Sundae Labs treasury management contracts into a separate auditable account. This provides accountability and oversight via smart contract administration with staged, verifiable disbursement.
3. Performance fee tied to verified growth: The fee is payable only against verified qualifying TVL growth, excludes ada price effects and non-attributable TVL, and returns to the treasury if unearned. A dedicated 2,000,000 ada independent audit or assurance allocation supports verification.
4. Retention is now priced into the payout schedule. Three commitments made publicly by Alphagrowth during the action's lifetime address this:

• Performance unlocks are back-loaded 30% / 30% / 40% at 30 days, three months and six months, so the largest tranche follows persistence rather than peak;
• Accelerated payouts for over-performance will be removed and the structure will be capped, with results above the cap routed to future proposals rather than shortened retention, preserving DRep decision-making; and
• The TVL observation window extends from 12 to 24 months with the six-month retention requirement preserved, so decay after year one remains visible. Together, maximum payout requires liquidity that is both material and durable, and no result shortens the period over which the team carries that requirement.

1. Operating Group governance is to be term-limited and broadened. AlphaGrowth has committed to term limits and to expanding and diversifying the group's composition once Phase 1 is operational. To preserve this safeguard, we expect the term rules and expanded composition settled before the Month 4 gate, not after it.

These commitments were made publicly rather than recorded in the metadata. We record them here as part of the public basis for this vote and expect them reflected in the operating documentation before first disbursement. Should they not be implemented as described, we would expect the Operating Group to withhold the Phase 3 release, and would treat the divergence as material to any follow-on request from this team.

The Cardano Foundation votes YES on this treasury withdrawal. We view PRIME as a credible attempt to turn Cardano's recent infrastructure progress into durable liquidity, and we regard its gating, return-to-treasury triggers, and audit allocation as an appropriate standard for treasury spending of this size, one we would like to see other proposers adopt.