Decrease Treasury Tax from 20% to 10%
313 DReps voted · 69 with a rationale · 17 changed their vote
Open a row to read the rationale.
- Yes2.1M ₳No rationale
- No2.1M ₳No rationale
- YesChanged2.1M ₳History
Earlier votes
Abstain1y agoSuperseded
- Yes2M ₳No rationale
- No2M ₳No rationale
- No1.9M ₳Rationale
I am voting NO on the proposal to decrease the treasury tax from 20% to 10%.
As someone who has been deeply inspired by Cardano’s vision, I want to support its sustainable growth. The Cardano Constitution states:
"Cardano is a decentralized ecosystem of blockchain technology, smart contracts, and community governance, committed to improving economic, political, and social systems for everyone, everywhere."
Fulfilling this mission requires continuous investment in research and development, along with a stable treasury. A strong treasury is the foundation that enables infrastructure improvements, decentralization efforts, and overall ecosystem growth, and reducing its inflows recklessly would jeopardize this foundation.
This proposal relies on an uncertain expectation of ADA price appreciation and lacks a solid foundation for sustainable economic planning. While higher staking rewards may seem attractive in the short term, financial stability is what truly secures Cardano’s future.
As a DRep, my mission is to expand knowledge through education and support the growth of the community. Inspired by Cardano’s vision, I am voting NO at this time to help build its future.
- NoChanged1.9M ₳History
Earlier votes
Yes1y agoSuperseded
- No1.9M ₳No rationale
- No1.8M ₳Rationale
DRep VCC vote ❌ NO on this proposal for the following reasons:
👉 There is no clear evidence that reducing the contribution to the Treasury will increase the number of staking participants. This requires concrete data and analysis rather than assumptions.
👉 The Cardano ecosystem needs more resources from the Treasury, not only to fund development projects but also to boost marketing, attract new users, and support liquidity for DApps. Reducing the Treasury’s funds could slow down these efforts.
👉 A slight increase in staking rewards does not bring significant benefits to delegators, whereas strong investment in ecosystem development creates real value, helping ADA appreciate sustainably. The focus should be on long-term growth rather than short-term benefits.
- Abstain1.8M ₳No rationale
- NoRevoted1.8M ₳Rationale
Changes to the treasury cut should at least wait until after we have a clear understanding of Cardano’s budget needs, both short-term and long-term. Since the first budget under on-chain governance hasn’t even been passed, it’s too soon for major treasury protocol changes. The treasury is a crucial asset — not only does it fund ongoing development, it also supports innovation within the community, and therefore overall adoption of Cardano. While costs may decrease over time, and ADA’s price will (hopefully) rise, it will likely be easier to reduce the cut later rather than increase it if funding falls short. A cautious approach is needed so that the treasury remains sustainable, especially as the reserve inflow declines over time. We should also assume conservative ADA prices so that we do not have to make drastic funding cuts during bear markets. Of course, every ADA should still be spent wisely (and systems put in place to ensure accountability), but I don’t believe lowering the treasury cut to decrease reliance would make a difference here.
While lowering the treasury cut would slightly increase staking rewards, it is unlikely that this would make much of a difference to staking participation. Staking ADA is very easy, and because it remains liquid there’s really no reason not to, so a small APY increase (e.g. from 2.5% to 2.8%) is unlikely to convince a large number of additional people to start staking.
In summary, changes to the treasury tax should wait until Cardano’s budget needs are clearer, keeping in mind long-term financial sustainability of the chain.
Earlier votes
No1y agoSuperseded
- No1.8M ₳Rationale
While I'm supportive of the idea of making staking more profitable, I think it is too early to reduce the treasure tax. I think if the proposal had been to reduce to 15% instead of 20% I may have been supportive. For now I think it is more important to have a well-funded treasury.
- No1.7M ₳No rationale
- No1.7M ₳No rationale
- No1.7M ₳No rationale
- No1.7M ₳No rationale
- No1.6M ₳No rationale
- No1.6M ₳Rationale
Staking rewards do not need to be higher. We need to incentivize the use of DeFi more. Also, taxes go to the common Treasury, from where we can fund development or allocate liquidity to stablecoins. All of this benefits all holders in the long run more than just increasing rewards.
- Yes1.6M ₳No rationale
- No1.6M ₳No rationale
- Yes1.6M ₳No rationale
- No1.6M ₳No rationale
- No1.5M ₳Rationale
Hard no for now. We are still in a moment where a treasury is vital to incentivize improvement, development and other apps that will increase the use and the security of the protocol. To cut the incentive by half would increase the staking rewards a 12%, but decrease the incentive by half for development.
The live development incentivized by the self-sustainable funding (treasury) it's one of the key differences between Cardano and other cryptocurrencies, making this one non-dependant on centralised entities.
- Yes1.4M ₳No rationale
- Yes1.4M ₳No rationale
- No1.4M ₳No rationale
- Yes1.3M ₳No rationale
- No1.3M ₳No rationale
- No1.2M ₳No rationale
- No1.2M ₳Rationale
Exercise Your Right to Vote:
The proposal for changing the taxation parameter from 20% to 10% is an important governance issue that directly impacts the ecosystem. Voting on this matter is not only a responsibility but also an opportunity to exercise our right to influence the taxation structure in Cardano.
Impact on Pool Decentralization:
My primary concern with reducing the taxation to 10% is that it disproportionately benefits multiple pools over single pools. The larger multiple pools would receive a larger share of the returns, which undermines the goal of decentralization. A reduction in the tax rate would make it easier for multi-pool SPOs (Stake Pool Operators) to further consolidate staking power and rewards, rather than encouraging the distribution of rewards among a wider variety of smaller pools. I believe we should prioritize the strengthening of decentralization by supporting the smaller pools, and only vary the taxation parameter in conjunction with other stake pool decentralization parameters.
Constitutional Constraints:
If the parameter change is accepted, the governance system will prevent any further changes to the taxation parameter for another 6 months. This significant period of inaction could leave us with a tax rate that doesn't align with the dynamic needs of the ecosystem at this time. Such a long period without the possibility of revision could be detrimental if unforeseen issues arise in the future.
Governance Bootstrap Period and Treasury Concerns:
As we are still in the governance bootstrap period, with a complex roadmap ahead, it is crucial that we maintain a healthy treasury. A reduction in the taxation rate could significantly impact the resources available for future development, especially as we work towards implementing a wide range of improvements and innovations. A stable and sufficiently funded treasury is essential to fund critical initiatives and ensure the long-term success of the network.
Strategic Use of the 10% Tax:
Rather than reducing the tax rate, I propose we keep the taxation for a strategic move. The tax can be used for future, more targeted initiatives, such as incentivizing the decentralization of the SPO network to smaller pools, or provide stable coin liquidity on Cardano, or fast-tracking development projects that are aligned with increased scalability. Using the extra tax for these initiatives could provide greater long-term value than simply reducing the tax rate.
Conclusion:
While the proposal to reduce the taxation parameter from 20% to 10% benefits stake-holders, the broader implications for decentralization amd treasury flexibility outweigh the benefits. Therefore, I will be voting No on this proposed parameter change.
- No1.2M ₳Rationale
I’m voting NO on this. Here is my rationale:
On its surface, this proposal sounds appealing as it will lead to an increase in staking rewards. Unfortunately, I also view this as a shortsighted reach for immediate enrichment that shortchanges the long-term goal of building out an attractive ecosystem that “earns” increased staking rewards via increased liquidity and use.
The timing of this governance action is also inauspicious: the budget has not been ratified yet and therefore there is no compelling data to determine if taking this action is actually warranted and that it won’t have a detrimental effect on Cardano’s ability to continue to grow and develop.
Lastly, proposing to halve the tax is more than ambitious. It would have been more appealing to propose a smaller reduction, for example, 3% or even 5% vs 10%.
- Yes1.2M ₳No rationale
- Yes1.1M ₳No rationale
- Yes1.1M ₳No rationale
- Abstain1.1M ₳No rationale
- No1.1M ₳No rationale
- No1.1M ₳No rationale
- No1.1M ₳No rationale
- No1M ₳No rationale
- No971.5K ₳No rationale
- No964.1K ₳No rationale
- Yes955.7K ₳No rationale
- No949.1K ₳No rationale
- No948.9K ₳No rationale
- No931.8K ₳No rationale
- Yes931.1K ₳No rationale
- Yes929.9K ₳No rationale
- NoRevoted881.2K ₳History
Earlier votes
No1y agoSuperseded
- No861.5K ₳No rationale
- Yes841.7K ₳No rationale