Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol
6 of 7 committee members voted
- 68bb0b42…874668bb0b42…8746YesActive · term ends epoch 653No rationale
- Ace Alliance71aa5b3a…8f04NoActive · term ends epoch 726Rationale
Ace Alliance finds the proposed "Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol" Treasury Withdrawals Governance Action unconstitutional. Rationales are archived at https://github.com/ace-alliance/ace-voting/
A PDF version of this rationale is also made available.
"Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol" (gov_action1pa6...2x2sz2) is a Treasury Withdrawals Governance Action and is therefore governed by both the general proposal standards in Article II, Section 6 and the additional Treasury Withdrawal standards in Article II, Section 7 of the Cardano Constitution. The Action seeks to withdraw 10,000,000 ada from the Cardano Treasury, valued by the proposers at approximately 2.0 million USD at a reference rate of 0.20 USD per ada, to fund Alchemy, a Bitcoin-backed finance infrastructure layer for Cardano built by Sundial and Charms. The request is split into two pools of approximately 1.0 million USD each: one for protocol infrastructure and staged launch liquidity backing the FIRE and ICE reserve assets, and one for delivery, audit, integrations, dashboards, legal and compliance work, and go-to-market execution.
Several of the Action's elements meet their respective standards. Article II.6's procedural standards are satisfied: the metadata anchors to a document whose on-chain blake2b-256 hash (c267ddd7a68d723104c27ab9e9101b9cdc2b767496fb3d7cbd6b947a1917214e) matches the anchored body, and the document supplies the title, abstract, motivation, rationale, itemized allocations, risk summary, and supporting references that Article II.6.2 requires; the anchor is hosted at a commit-pinned GitHub URL rather than on content-addressed storage, which the anchor hash renders tamper-evident in any case. Article II.7.1's terms are stated: purpose, staged deployment, a two-pool budget with itemized delivery allocations including 200,000 USD for independent security review, audit, and economic modeling, ada price protection above a 0.35 USD reference rate, and return conditions covering unused delivery funds, excess ada, and quarterly return of profits from the launch liquidity position. On Article II.7.2 we note a deficiency: the metadata contains no prior treasury funding statement of any kind for Sundial or Charms. If the proposers have received no treasury funds in the last 24 months, silence may technically satisfy the Article's terms, but the omission of even a negative disclosure deprives reviewers of an affirmative record that every other Treasury Withdrawal in this cycle has provided.
Article II.7.5 (Administrator). This is where the Action fails. The proposal states that "Intersect is proposed as interim fund administrator, subject to confirmation and final agreement," and further provides that "if Intersect does not confirm within 30 days of enactment, the proposer will nominate an alternative independent administrator, subject to community notice and appropriate constitutional review." By its own terms, the proposal does not have an administrator. It has a candidate who has not accepted the role, and a commitment to search for someone else after enactment if the candidate declines.
The on-chain record confirms that Intersect has not agreed. When Intersect agrees to administer a Treasury Withdrawal, its witness signature appears on the submission transaction; the eleven Cardano Budget Process withdrawals Intersect is administering in this cycle were all submitted in a single transaction signed by Intersect's submission credential in epoch 638. The transaction that submitted this Action (0f75dd11be0b7a6cb4b305a175b17cf4b60cd307c052fccabf9f572950e70583) carries no witness signature from Intersect; it was signed only by the proposer's credential. The withdrawal destination, stake17xzc8pt7fgf0lc0x7eq6z7z6puhsxmzktna7dluahrj6g6ghh5qjr, is a genuine Intersect-controlled Treasury Reserve Smart Contract stake address, but it is the instance Intersect operated for the 2025 budget cycle, while Intersect's own submissions in the current cycle direct funds to the new 2026 instance. Directing funds to an organization's smart contract does not make that organization the administrator. Intersect has not agreed to administer these funds and has not agreed to receive them at that address.
Beyond the on-chain record, we also verified through other public channels whether Intersect has indicated in any form that it would act as administrator of this Treasury Withdrawal. We have found no such indication.
The administrator required by Article II.7.5 must exist at the moment of withdrawal. A unilateral designation that the designee has not accepted is not an administrator, and the proposal's fallback clause concedes the point: it contemplates identifying, noticing, and constitutionally reviewing a replacement administrator only after enactment, which is after the withdrawal has been irrevocably approved and 10,000,000 ada has been deposited into a smart contract whose controller has not consented to hold them. We have applied this frame consistently: oversight and administration structures that would come into existence only after enactment cannot satisfy Article II.7.5, because at the moment the funds leave the Treasury no person, institution, company, or smart contract with an accepted mandate stands between the recipient and the funds.
Article II.7.6 (Holding Requirements). We verified on-chain that the destination address is script-locked (CIP-19 mainnet header byte 0xf1), is not delegated to any stake pool, and is delegated to the predefined always-abstain DRep. These prongs are met, but compliance with the holding requirements cannot cure the absence of an administrator, because the account in question belongs to an organization that has not agreed to participate in this Action.
Ace Alliance finds the proposed "Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol" Treasury Withdrawals Governance Action unconstitutional. The Action violates Article II.7.5 because no administrator exists at the moment of withdrawal: Intersect is named only as a proposed interim administrator subject to confirmation and final agreement, the submission transaction carries no witness signature from Intersect, the designated destination is an Intersect smart contract address that Intersect has not agreed to receive funds into for this project, and the proposal defers the selection and constitutional review of any replacement administrator until after enactment. A resubmission with a confirmed administrator would cure the defect.
- Cardano Japan Council725d4d44…7b31NoActive · term ends epoch 653Rationale
We consider this governance action to be unconstitutional.
This proposal is a Treasury Withdrawal Governance Action to withdraw ₳10,000,000 from the Cardano Treasury in connection with "Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol," proposed through a collaboration between Sundial Protocol and Charms. With regard to Article 2, Section 6, Paragraphs 1 and 2 of the Cardano Constitution, this proposal employs an off-chain reference fixed by a commit hash and presents the proposal's title, summary, rationale, justification, and relevant supplementary materials. These comply with the requirements regarding the format and supporting documentation for Governance Actions. Regarding Article 2, Section 7, Paragraph 1, this proposal aims to build a Bitcoin Treasury protocol and BTCfi infrastructure layer for Cardano, and outlines a phased implementation plan, a breakdown of costs, and conditions for repayment to the Treasury. Regarding Article 2, Section 7, Paragraph 3, this proposal states that the requested withdrawal is designed not to exceed the prevailing Net Change Limit. Regarding Article 2, Section 7, Paragraph 4, this proposal allocates funds for independent security reviews, audits, and economic modeling, among other activities, and the accompanying supplementary materials present metrics for oversight via a public dashboard and monthly reports. Regarding Article 2, Section 7, Paragraph 5, this proposal nominates Intersect as the provisional fund administrator, subject to confirmation and final agreement, and describes a framework to support accounting, fund segregation, milestone verification, reporting, and custody controls. Regarding Article 2, Section 7, Paragraph 6, this proposal states that any ADA held by the administrator will be kept in auditable accounts and delegated to auto-abstain, not to a Stake Pool Operator. However, Article 2, Section 7, Paragraph 2 requires future recipients of Treasury Withdrawals to disclose whether they have received ADA from the Cardano Treasury within the past 24 months. Upon reviewing this proposal, we were unable to confirm such explicit disclosure. We interpret Article 2, Section 7, Paragraph 2 as requiring explicit disclosure regarding whether ADA has been received from the Cardano Treasury, even if no Treasury funds have been received. Therefore, we cannot confirm that this proposal meets the disclosure requirements of that paragraph. Consequently, we determine that this proposal is unconstitutional.
For the reasons stated above, we determine that it is unconstitutional.
- Eastern Cardano Council2ea7a78e…10ecNoActive · term ends epoch 726Rationale
We have determined that this treasury withdrawal governance action is unconstitutional.
The governance action with ID “gov_action1pa6...2x2sz2” and title “Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol” is a Treasury Withdrawal, so is subject to ARTICLE II, Section 7 of the Cardano Constitution. While most of the requirements under this section were met by this governance action, it did not fulfil them all.
ARTICLE II, Section 7(2) states ""Treasury Withdrawals" actions shall disclose whether the prospective recipient of the "Treasury Withdrawals" action has received ada from the Cardano Treasury within the last 24 months."
The governance action does not provide any information about whether the "prospective recipient" has "received ada from the Cardano Treasury within the last 24 months."
RTICLE II, Section 7(5) states ""Treasury Withdrawals" actions shall designate one or more administrators responsible for monitoring how the funds are used, and ensuring the deliverables are achieved."
While the governance action states "Intersect is proposed as interim fund administrator, subject to confirmation and final agreement. If Intersect does not confirm within 30 days of enactment, the proposer will nominate an alternative independent administrator, subject to community notice and appropriate constitutional review.", this is not considered compliant, as Intersect has not agreed to perform this role. A designated administrator must be confirmed, not "proposed".
We therefore find this governance action Unconstitutional.
This governance action does not sufficiently fulfil the criteria specified for treasury withdrawals in the Cardano Constitution, so is deemed unconstitutional.
- KtorZ64f97568…3a49NoActive · term ends epoch 653Rationale
Not consitutional
The proposal does not identify a definitive administrator for the Treasury withdrawal. Instead, it proposes Intersect as an interim administrator subject to future confirmation and provides that, if Intersect does not accept the role, an alternative administrator will be nominated after enactment. The administrator responsible for receiving, safeguarding, and disbursing Treasury funds must be identified as part of the governance action itself. Delegating that decision until after approval is incompatible with the constitutional requirements governing Treasury withdrawals.
The proposal also describes Treasury-owned launch liquidity and a future governance process through which the Treasury may recover the deployed principal. While innovative, the proposal does not sufficiently define the legal and operational arrangements governing Treasury ownership, custody, and recovery of those assets should the implementing parties cease operating. This reduces the clarity required under Article II - Section 6.2 and reinforces the uncertainty surrounding Treasury administration.
Futhermore, the proposal also references governance metadata hosted through a GitHub raw.githubusercontent.com permalink tied to a specific commit. While pinning to a commit significantly improves stability compared to referencing a moving branch, it does not provide the same immutability guarantees as content-addressed storage. Git object identifiers remain based on SHA-1, which has been demonstrated to be vulnerable to practical collision attacks. Although constructing a meaningful chosen-prefix collision in this context would be difficult, the Constitutional requirement is to provide immutable references rather than merely stable ones. Content-addressed systems such as IPFS, where retrieval is intrinsically bound to the cryptographic hash of the content, better satisfy that requirement. I therefore consider the use of GitHub raw URLs instead of immutable content-addressed references to be inconsistent with the intent of Article II - Section 6.2.
Hence, I identify clear constitutional violations and consider the proposal constitutionally non-compliant.
- Tingvard646d1b3a…be43NoActive · term ends epoch 726Rationale
Tingvard judges the “Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol” Treasury Withdrawal governance action unconstitutional.
This governance action requests 10,000,000 ADA from the Cardano Treasury to fund Alchemy, a Cardano-native Bitcoin treasury protocol and BTCfi infrastructure layer proposed by Sundial Protocol and Charms.
The proposal identifies the purpose of the withdrawal, the amount requested, the intended delivery model, the proposed use of funds, audit and reporting arrangements, and several refund or return conditions. It also states that any administrator-held ada will be kept in auditable accounts and delegated to auto-abstain, not to a Stake Pool Operator.
However, Article II, Section 7, §5 requires Treasury Withdrawal actions to designate administrators responsible for monitoring the use of treasury funds and ensuring the delivery of the outputs specified in the proposal.
Tingvard does not find that this requirement is satisfied.
The proposal states that “Intersect is proposed as interim fund administrator, subject to confirmation and final agreement.” It further states that if Intersect does not confirm within 30 days of enactment, the proposer will nominate an alternative independent administrator, subject to community notice and appropriate constitutional review.
This does not designate an administrator. It suggests a possible administrator, while making that role conditional on future confirmation and final agreement. It also leaves open the possibility that a different administrator may be nominated after enactment.
A Treasury Withdrawal cannot leave the administrator role unresolved at the point of constitutional assessment. The administrator must be named and responsible for the relevant monitoring and delivery assurance functions under the proposal. A suggested or conditional administrator is not enough.
This is especially important where the proposal involves staged deployment, treasury-supported launch liquidity, reserve management, delivery funds, audit coordination, reporting, and possible return of funds. These features all depend on a clearly designated administrator from the point of withdrawal.
Tingvard therefore finds that the proposal fails to satisfy Article II, Section 7, §5.
Tingvard finds the “Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol” Treasury Withdrawal governance action unconstitutional.
The proposal may contain many of the other elements expected in a Treasury Withdrawal, but it does not properly designate an administrator. Intersect is only proposed as interim administrator, subject to confirmation and final agreement, and an alternative administrator may be nominated later.
Tingvard therefore judges this governance action unconstitutional.
- Cardano Curia84feba94…6bd5Not votedActive · term ends epoch 653No rationale