Governance ReviewNo. 10Epochs 545 to 54710 Mar 2025 to 25 Mar 2025
The proposal to lower Cardano's treasury cut to 10% expires at 23.2%
The proposal to halve Cardano's treasury share of rewards from 20% to 10% expired with 23.2% DRep support. Five committee members found it unconstitutional, four citing the absence of a plan to reverse the change if its effects proved harmful.
The proposal asks to halve the treasury cut from 20% to 10%
Decrease Treasury Tax from 20% to 10% asked to lower the treasuryCut parameter, the share of each epoch’s rewards that goes to the treasury before stakers are paid, from 20% to 10%. The proposal’s document argues that the 20% rate was set at the beginning of Shelley and never reassessed, and puts the gain at 12.5% more in staking rewards, an assumed yield of 4.0% rising to about 4.5%.
As a change to an economic parameter it needed 67% of DRep power and 66.7% of the committee, and pools had no vote on it. It expired at the start of epoch 546 with 23.2% of DRep power behind it, on 140 yes votes, 223 no and 11 abstain, ₳909.3M of power for it against ₳2.02B.
The vote on the 10% treasury cut, in delegated ada
Bars show delegated ada behind votes cast, labels the DRep share against the 67% an economic parameter change needs
The Eternl DRep Committee, BTBF_XSP, Pi Lanningham and Hephaestus Stake Pool voted no in epoch 545. The Eternl DRep Committee wrote that taxing the rewards of large entities and putting them to work for Cardano “is more important than a small percentage gain for each individual” holder. BTBF_XSP wrote that the parameters should be simulated again first, since they “are intricately interconnected”. Pi Lanningham wrote that raising the rate later “will be harder” than lowering it, so a more gradual approach should be taken. Hephaestus Stake Pool wrote that staking returns are nearer 2.5% to 3% than the 4% the proposal assumed, and asked for the cut to be modelled together with the other parameters, citing the Cardano Foundation’s report on how they change the treasury’s actual share of the ada released each epoch.
YUTA and CardanoYoda (MANDA Pool) had voted no in epoch 540, writing that research and scaling still need treasury money. CryptoCrow, SIPO and Martin Lang voted yes in epochs 542 to 544, writing that the treasury is already large or that the 20% rate was never reassessed. The review of epochs 542 to 544 quotes CryptoCrow, SIPO and Martin Lang on this proposal.
Five committee members find the 10% cut unconstitutional
The Cardano Foundation in epoch 543, the Eastern Cardano Council in epoch 544, and Input Output, the Intersect Constitutional Council and Emurgo in epoch 545 found the cut unconstitutional. The Cardano Atlantic Council in epoch 544 and the Cardano Japan Council in epoch 545 found it constitutional, a committee share of 28.6% against the 66.7% it needed. Four of the five wrote that the value itself meets the constitution’s guardrails for the parameter.
Input Output found the proposal unconstitutional because it lacks “one constitutional requirement: a reversion plan”, while calling it a contribution “made in good faith”. The Cardano Foundation also cited the missing reversion plan, together with the lack of the comprehensive technical review the constitution requires. The Intersect Constitutional Council, split four to three, objected to the missing plan and to the proposal’s yield figures as potentially misleading, since by its reading returns on some of the most saturated pools averaged nearer 2.8%, and wrote that a corrected resubmission would most likely be found constitutional.
The Eastern Cardano Council, split four to two, read the reversion plan requirement as covering the secondary effects of the change and found the technical review insufficient, while its two dissenting members argued that a committee holding a veto should use it only for clear violations. Emurgo wrote that the proposal does not address its expected impact on the Cardano ecosystem. The Cardano Atlantic Council had checked the same requirements and found them met, technical review and expected impact included.
Two net change limits and the roadmap stay open
Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA, filed in epoch 546, asks for ₳300M for 2025 and ₳250M for 2026, sized to forecast treasury inflows, with voting ending at the start of epoch 553. 2025 Net Change Limit, filed in epoch 547, asks for ₳350M from the start of epoch 532 to the end of epoch 604, sized to the treasury’s actual income over epochs 459 to 531, with voting ending at the start of epoch 554. Both documents state that a budget request submitted without an agreed net change limit is unconstitutional. Defining the Cardano Vision and Roadmap for 2025 and beyond, filed in epoch 542, stays open until its voting ends at the start of epoch 549.
Delegated power passes ₳4B across 807 DReps
The power delegated to DReps rose from ₳3.89B at epoch 545 to ₳4.10B at epoch 547, held by 807 DReps, and the count of DReps with a vote in the previous twelve epochs rose from 391 to 400, both the highest since epoch 508. The window recorded 247 votes, superseded votes included, 216 from DReps, 25 from pools and 6 from committee members, with final votes from 155 DReps. The treasury reading rose ₳8.6M to ₳1.71B, with no treasury withdrawal enacted yet.
Decided in this window
| Action | Outcome | DRep yes |
|---|---|---|
| Decrease Treasury Tax from 20% to 10% | Expired 546 | 23.2% |
Open at the close of the window
| Action | Status | DRep yes |
|---|---|---|
| Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA | Voting ends at the start of epoch 553 | n/a |
| 2025 Net Change Limit | Voting ends at the start of epoch 554 | n/a |
| Defining the Cardano Vision and Roadmap for 2025 and beyond | Voting ends at the start of epoch 549 | n/a |
n/a: the record holds no DRep share from inside this window for this action, only a tally read after it closed.
The numbers behind the window
- Delegated to DReps, at the start of epoch 545
- ₳3.89B
- Delegated to DReps, at the start of epoch 547
- ₳4.10B
- Votes cast in the window, superseded votes included
- 247
- DReps whose final vote fell in the window
- 155
- Treasury, at the start of epoch 545
- ₳1,699.2M
- Treasury, at the start of epoch 547
- ₳1,707.9M
- DRep shares are the share of counted power: abstaining power is left out, while power that did not vote and power delegated to the always no confidence option are folded into the no side. Committee shares are yes votes over the members active at the decision minus those who abstained.
- The committee reasons are read from the rationales the members attached to their votes, and the DRep reasons from the published rationales of the voters named, all cited under the sources below. They are the accounts of those voters, not findings of this edition. Each committee vote is dated by the epoch it was cast in. The rationale the Cardano Japan Council attached could not be retrieved, so no reason is given for its vote.
- What the treasury tax cut and the two limit proposals ask for is read from their own documents, also named below. The period of the single year limit is the one that proposal itself defines, which is not the end epoch the site registry carries today: a later action extended it.
- None of the three open proposals is decided in this window, so the prose gives them no share, and the table marks the tallies stored for them as read after they closed.
- The count of DReps with a recent vote is a rolling twelve epoch measure that includes superseded votes and excludes votes without a block time. Highs and lows are read over epochs 508 to 547. Delegated power, the count of DReps holding it and the concentration measures exclude the predefined delegation options.
- Votes cast is every vote of epochs 545 to 547 across all three roles, superseded votes included.
Sources and further reading
20 sources, open the list
- The document behind the treasury tax cut asks to reduce the treasury cut from 20% to 10% to raise staking rewards, describes the cut as the share taken from each epoch's rewards, new ada from the reserves plus transaction fees, before they are distributed to stakers, argues that the 20% rate was an arbitrary level set at the beginning of Shelley that has never been reassessed, and puts the effect at a 12.5% increase in staking rewards, raising an assumed baseline yield of 4.0% to approximately 4.5%. the document behind the treasury tax cut
- The Eternl DRep Committee voted no on the treasury tax cut in epoch 545, writing that taxing the rewards of large entities such as exchanges and the founding organisations and putting them to work for Cardano matters more than a small percentage gain for each holder. the rationale of the Eternl DRep Committee on the treasury tax cut
- BTBF_XSP voted no on the treasury tax cut in epoch 545, writing that the economic parameters are intricately interconnected and not functioning as designed, so they should be simulated again before any adjustment. the rationale of BTBF_XSP on the treasury tax cut
- Pi Lanningham voted no on the treasury tax cut in epoch 545, writing that raising the value again would be harder than lowering it, so a more gradual approach should be taken, and that the justification offered did not convince. the rationale of Pi Lanningham on the treasury tax cut
- Hephaestus Stake Pool voted no on the treasury tax cut in epoch 545, writing that staking returns are nearer 2.5% to 3% than the 4% the proposal assumes because issuance declines along a curve, and citing the Cardano Foundation's report on economic parameters on how the other parameters change the treasury's actual share of the ada released each epoch, so the change should have been modelled in that context. the rationale of Hephaestus Stake Pool on the treasury tax cut
- YUTA voted no on the treasury tax cut in epoch 540, writing that a lot of fundamental research and development is still needed for Cardano to become a platform for billions of people, naming scalability, partner chains, alternative nodes, governance tools and research to reduce node memory requirements. the rationale of YUTA on the treasury tax cut
- CardanoYoda voted no on the treasury tax cut in epoch 540, writing that the scalability era is not complete and will need treasury ada, that it would rather put a freed share to work in decentralised finance than into staking rewards, and that an extra 6 ada per 100,000 staked makes no sense if the price falls. the rationale of CardanoYoda on the treasury tax cut
- CryptoCrow voted yes on the treasury tax cut in epoch 542, writing that the treasury is already substantial, that higher staking rewards would help offset expenses in a bear market and encourage more nodes, and that attention to Cardano as a source of passive revenue would help the ecosystem grow. the rationale of CryptoCrow on the treasury tax cut
- SIPO voted yes on the treasury tax cut in epoch 542, writing that lowering the tax would raise staking rewards by approximately 12.5%, that the 20% rate was set arbitrarily at launch and never reassessed, and that higher rewards would encourage delegation and strengthen decentralisation. the rationale of SIPO on the treasury tax cut
- Martin Lang voted yes on the treasury tax cut in epoch 544, writing that setting the rate at 20% at the start had been wise and had built a massive treasury, that the cut is within the guardrails, that it would put pressure on the expenses planned for the next year, and that the rate can be raised again. the rationale of Martin Lang on the treasury tax cut
- The Cardano Foundation found the treasury tax cut unconstitutional in epoch 543, writing that the proposed rate falls within the permitted range but that the proposal lacks the comprehensive technical review the constitution requires and the mandatory reversion plan. the rationale of the Cardano Foundation on the treasury tax cut
- The Eastern Cardano Council found the treasury tax cut unconstitutional in epoch 544, writing that the proposed value meets the guardrails for the treasury cut, that it read the constitution's reversion plan requirement as also covering how to revert the secondary effects of the change, and that the proposal did not undergo the sufficient technical review and scrutiny the constitution requires. the rationale of the Eastern Cardano Council on the treasury tax cut
- The same rationale records a split inside the Eastern Cardano Council, four members to two, in which the two who would have found the action constitutional acknowledged the shortcomings but did not treat them as grounds for an unconstitutional verdict, arguing that a committee of a few members holding a veto should only use it for clear constitutional violations. the same rationale, on the split inside the council
- Input Output found the treasury tax cut unconstitutional in epoch 545 for lacking one requirement, a reversion plan, while noting that the intended value falls within the guardrails and that the proposal was made in good faith. the rationale of Input Output on the treasury tax cut
- The Intersect Constitutional Council found the treasury tax cut unconstitutional in epoch 545 on a split of four to three, noting that the parameter is called tau in the Shelley genesis file, treasury_growth_rate in db-sync and treasuryCut in cardano-cli and the constitution's guardrails, writing that the two main objections were the absence of a recovery or reversion plan, which the constitution requires for each parameter change, and potentially misleading figures in a mathematical justification that assumes staking returns of 4% rising to 4.5% when returns on some of the most saturated pools averaged nearer 2.8%, and that those voting unconstitutional would most likely consider a corrected resubmission constitutional. the rationale of the Intersect Constitutional Council on the treasury tax cut
- Emurgo found the treasury tax cut unconstitutional in epoch 545, writing that it satisfies all the necessary guardrails on the treasury cut but does not address its expected impact on the Cardano blockchain ecosystem, as the constitution provides, and that from a technical perspective a revision plan would be necessary. the rationale of Emurgo on the treasury tax cut
- The Cardano Atlantic Council found the treasury tax cut constitutional in epoch 544, listing the requirements it meets: a legible standard, the minimum rationale, matching on chain and off chain content, technical review and scrutiny, an account of its expected impact on the ecosystem, and a value inside the guardrails for the treasury cut. the rationale of the Cardano Atlantic Council on the treasury tax cut
- The Cardano Japan Council found the treasury tax cut constitutional, with its vote cast in epoch 545. the vote of the Cardano Japan Council on the treasury tax cut
- The two year proposal asks for ₳300M for 2025 and ₳250M for 2026, on the argument that treasury inflows are forecast at ₳300M in 2025 and ₳265M in 2026, the second rounded down for ease of remembering, and states that a budget request submitted without an agreed net change limit is unconstitutional. the document behind the two year limit
- The single year proposal asks for ₳350M for a period that begins at the start of epoch 532 and ends with epoch 604, as agreed with the budget committee, proposes that the limit follow the previous year's treasury inflows, records an actual inflow of 335,957,093 ada from epoch 459 to epoch 531, within 5% of the proposed figure, and states that a budget request submitted without an agreed net change limit is unconstitutional. the document behind the single year limit