Decrease Treasury Tax from 20% to 10%
313 DReps voted · 77 with a rationale · 6 changed their vote · 9 re-voted unchanged
Open a row to read the rationale.
Changed votes: 3 to yes, 3 to no, together voting with 138.5M ₳ of voting power.
- Abstain765.6K ₳No rationale
- No760.2K ₳No rationale
- No678.7K ₳No rationale
- No663.8K ₳Rationale
We, the Dutch DRep, vote “No” on this proposal to reduce the Cardano treasury cut from 20% to 10%. We would like to thank Andrew Westberg for his effort and for initiating this important discussion. Our reasons for voting “No” are as follows:
While the proposal aims to improve economic incentives, the evidence presented is not sufficiently conclusive to demonstrate its long-term impact. The rationale appears somewhat one-sided and lacks robust data to support such a significant change.
We also disagree with the method by which this proposal was put forth, moving straight to an on-chain governance action without a more thorough off-chain review. We believe major economic parameter changes should follow a careful, well-structured, and transparent deliberation process.
A recent video titled “Cardano: NerdOut – Let’s Have a TEA Party” frames a ‘No’ vote as an endorsement of the current 20% tax. We do not share that perspective. Our ‘No’ vote pertains strictly to this immediate request to lower the parameter to 10%. We believe a more comprehensive analysis and community-driven consensus should guide any revision of the treasury cut.
For these reasons, we cast our vote as “No” and invite further evidence-based discussion and inclusive engagement to reach a sustainable decision on treasury parameters.
- Yes660.5K ₳No rationale
- No653.9K ₳No rationale
- Yes637.5K ₳No rationale
- Yes636.4K ₳No rationale
- Yes627.2K ₳No rationale
- No604.7K ₳Rationale
I am voting no not because I disagree with the concept, but because I believe at this point in the development cycle of the ecosystem it is not appropriate. I would prefer an incremental approach that would be less disruptive, and the Protocol Parameter Governance Action Type as proposed does not fully comply with the requirements put forward in the Cardano Constitution.
A healthy treasury is needed for network stability and future growth of the ecosystem. These early stages of ecosystem development, will require accelerated treasury spending, so keeping expansion at the current rate maintains ecosystem stability. It is essential to understand the ecosystem requirements before making changes to treasury funding.
The negative impact on defi activities and TVL growth will degrade Cardano's market share to competitive ecosystems with more active and lucrative defi markets. Additionally defi activities are the primary driver of all transaction volume in the ecosystem. Reducing transaction volume will have a negative knock on effect to treasury growth degrading ecosystem stability. Furthermore, defi yields need to be more competitive than staking rewards to attract liquidity provisions to and within the ecosystem.
What about Basho? I do not consider the Cardano roadmap completed until we have addressed the Basho era. There are several scaling enhancements that need to be fully developed and implemented, until we know the costs or have them completed we need to maintain a healthy and growing treasury.
When the ADA crypto currency can hold a $1 USD floor for more than 12 months I would consider that a sufficient fiat valuation threshold to justify a reduction in tau as it relates to price in fiat.
The Cardano network is still bootstrapping and has not fully developed its' roadmap, and why it still requires significant ecosystem adoption before it can safely reduce the current admittedly high tau for treasury funding.
- No598.8K ₳Rationale
I’m not entirely convinced that the rationale provided justifies such a substantial treasury tax reduction at this stage. While enhancing staking rewards is appealing, the uncertainty around the real usefulness and practical benefits of a lower treasury tax remains a concern. A well-funded treasury is one of Cardano's strengths, attracting developers, funding future growth, and providing stability during uncertain market conditions. The proposal overly relies on speculative assumptions about ADA price appreciation, potentially risking long-term sustainability. Moreover, the incremental increase in staking rewards seems minimal compared to the potential advantages of retaining robust treasury resources. Given these uncertainties, I believe it's better to avoid significant reductions until clearer evidence or deeper analysis demonstrates that such a change would genuinely benefit the wider ecosystem.
- Yes582.9K ₳Rationale
SIDAN Lab is voting YES on governance action Decrease Treasury Tax from 20% to 10%. Below are the key reasons supporting this decision:
Optimizing Treasury Management & Budget Efficiency
The Cardano treasury has accumulated significant funds, yet there is no proven track record of effective fund utilization. Without a clear, efficient use of treasury funds, continuing to accumulate excessive reserves is unnecessary.
Taxation should be set at the minimum level necessary to sustain the network while ensuring proper allocation of resources.Enhancing Staking Incentives & Network Security
Increasing staking rewards encourages more ADA holders to participate in staking, reinforcing network decentralization and security.
A higher return on staking could attract new users to Cardano, strengthening overall ecosystem growth.
This change promotes a sustainable and decentralized governance model, ensuring that resources are distributed efficiently rather than centralized in the treasury.By reducing the treasury cut to 10%, we strike a better balance between staking incentives and treasury sustainability.
- Yes579.1K ₳No rationale
- Yes574.2K ₳No rationale
- No568K ₳No rationale
- Yes550.1K ₳No rationale
- Yes506.2K ₳No rationale
- No503.6K ₳No rationale
- No502.1K ₳No rationale
- Yes479.2K ₳No rationale
- No478.5K ₳No rationale
- No466.2K ₳No rationale
- No435.9K ₳No rationale
- Yes435.4K ₳No rationale
- No433.2K ₳No rationale
- Yes401.2K ₳No rationale
- No393.6K ₳Rationale
There is no clear evidence that reducing the contribution to the treasury will increase the number of staking participants. This requires specific data and analysis instead of just relying on 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 may slow down this process. A small increase in staking rewards will not bring significant changes to delegators, while investing heavily in ecosystem development will create real value, helping ADA increase in price in a sustainable way. We need to focus on long-term development instead of prioritizing short-term benefits.
- Yes390.2K ₳No rationale
- Yes388.8K ₳No rationale
- YesChanged379.5K ₳Rationale
I'm voting Yes on the reduction of the 'treasury tax'
treasuryCutto 10%, because I do not believe in the effective management of the treasury by the currently developed process anymore. A reduction in the funds this process can access seems prudent and at the same time delays the necessity to find other solutions for the rewards for pool operators and their delegators getting dangerously low.Earlier votes
No1y agoSuperseded
I'm voting No on the constitution, because I am very dissatisfied with the whole process how this constitution was pushed through. There were a lot of proposals for a leaner and less ambiguous constitution. Although there were a lot of workshops and the constitutional convention, they side-lined all requests for larger changes and only allowed minor corrections. This was all just done for the marketing, not to actually come up with a good constitution. No to this!
- Yes379.3K ₳No rationale
- Yes371.7K ₳No rationale
- Yes366.6K ₳No rationale
- Yes358.6K ₳No rationale
- YesRevoted356.1K ₳Rationale
The treasury will soon hold 4% of ADA's circulating supply, which is too high. Somewhere around 1% would make a lot more sense. If we want to spend more, ADA will need to increase in value. Cutting the tax that goes to the treasury by around half would create more urgency around fiscal responsibility and around avoiding over-spending in the annual budget. It's great that we have a significant runway of ADA in the treasury, and that ADA should increase in fiat value by a massive amount very soon, but we shouldn't feel so comfortable proposing massive budgets without generating organic treasury income first. Higher staking rewards will make the ADA token more attractive to retail users, should bring more users and should help dApps experience higher volumes. In summary, this would be good for Cardano users and would light a fire under us to start generating actual income and not relying so heavily on reserve ADA.
Earlier votes
Yes1y agoSuperseded
- No330.6K ₳No rationale
- No329.7K ₳No rationale
- Yes327.4K ₳Rationale
The treasury has accumulated enough funds to sustain ecosystem development for many years, making such a high tax rate unnecessary.
The tax was originally set at 5% but was increased to 20% just before Shelley's launch in 2020. It was done as a precaution, not a necessity.
Now that the treasury holds roughly 1.7 billion ADA, reducing the tax back to 10% seems like a reasonable recalibration to support it's efficiency.
A large and growing treasury can lead to less scrutiny over spending decisions since there is little pressure to allocate funds efficiently.
We must strike the right balance, and I believe 10% sounds about right.
- Yes324.3K ₳No rationale
- No321.8K ₳No rationale
- No321.6K ₳No rationale
- Yes318.6K ₳No rationale
- No318.1K ₳Rationale
Given the potential risks to long-term sustainability, we are voting no on the proposal to decrease the treasury tax from 20% to 10%.
Maintaining the current rate ensures that the treasury can continue to adequately fund necessary activities,
support future growth, and maintain reserves for unexpected needs.
This approach safeguards Cardano's ability to remain competitive and resilient, fulfilling its commitment to a sustainable blockchain ecosystem. - No314.4K ₳Rationale
Decrease Treasury Tax from 20% to 10%
My vote for the proposal to decrease the treasury tax from 20% to 10% is NO. Below is my rationale.
Github Link of this file: https://github.com/kostaspanagias/drep/blob/main/voting/2025/2/taxratecut.md – You can visit this link to view the formatted version of these contents. The GitHub page provides a more user-friendly and human-readable format compared to the on-chain or Cardano Explorer metadata.
Rationale
It's easier to reduce the tax rate than to increase it. If we reduce the tax rate now to the lowest permissible amount and later find that the treasury is depleting faster than anticipated, it would be more challenging to increase it again.
The proposed decrease is too rapid. I would prefer a more conservative approach, where we gradually lower the tax rate (e.g., from 20% to 18%, then to 15%, etc.), evaluate the results at each step, and proceed cautiously with further adjustments.
The impact on staking rewards is minimal. Current staking rewards are below 4%, with a more realistic range of 2.5%–3.5%. A 12% increase in rewards would bring them to approximately 2.8%–3.9% (a net increase of just 0.3%–0.4%). I fail to see how such a small increase would attract users from other blockchains to join Cardano solely for staking rewards.
There is insufficient research supporting this move. To my knowledge, no research, paper, or detailed analysis has been presented to demonstrate the potential impact of this tax reduction or simulate how it might deplete treasury reserves over time. Without proper data, it's difficult to assess whether this change would have a minor or significant impact on the treasury.
We need substantial funds for development and marketing. Blockchain technology is still in its early stages, and I anticipate that we will require significant resources for development (e.g., scaling solutions, quantum resistance technologies) and marketing (e.g., driving adoption, improving communication, educating users). A higher treasury tax ensures a steady flow of funds to support these critical needs.
This is our first year managing community funds. As a community, we are in the early stages of learning how to govern ourselves and allocate resources effectively. Inefficiencies, errors, and potential misallocations are inevitable as we refine our processes through trial and error. This is not about wastefulness or bad actors – it’s simply part of the learning curve.
Startups reinvest profits; so should we. Drawing a parallel with startups: In their early stages, startups typically reinvest profits rather than distributing dividends until they establish themselves within their markets and industry lifecycle. Similarly, Cardano should prioritize reinvesting transaction-generated funds into growth rather than increasing "dividends" (i.e., staking rewards). These investments will position us as a leading blockchain in the future, where an increased number of transactions and price appreciation will more than compensate for our early investments.
Increased staking rewards do not encourage network usage. Even a small percentage increase in rewards at this stage promotes inertia rather than active participation in the ecosystem. Cardano offers exciting opportunities for participants to engage meaningfully: earning yield in decentralized finance (DeFi), participating in DAOs, trading NFTs, engaging with memecoin communities, using decentralized exchanges, and exploring real-world assets and decentralized applications (dApps). Active participation helps users understand blockchain's potential, educates the community, attracts new users, and drives adoption. This increased engagement will boost network utility and ensure sustainability – both in terms of transactions generating tax revenue and actual usage.
- No313.8K ₳Rationale
Rationale for "No" vote for the GA proposal to reduce the treasury cut from 20% to 10%.
TLDR: While you could argue this proposal may offer short-term benefits for stakers, on balance I feel the risk of undermining long-term sustainability and resilience of Cardano’s ecosystem is greater. I also believe economic parameters shouldn't be considered or changed in isolation. My line of reasoning supports a cautious approach that prioritises the long term stability and strategic capacity of the treasury over a possible modest increases in staking rewards.
Long-Term Stability Over Short-Term Gains:
Yes - boosting staking rewards is an attractive prospect, but the treasury's robust funding is crucial to maintain long-term ecosystem health and resilience especially if we have market downturns, unforeseen challenges or "Black Swan" events .
I do not believe that there would be a significant staking reward increase, and the relatively small increase in rewards doesn't, in my view, justify the risk of depleting funds needed for future developments, and could leave the network vulnerable to unforeseen events.Speculative Compensation Assumption:
I feel this proposal is made with an assumption or expectation that Ada’s price will consistently appreciate to make up for the reduced treasury inflows, which cannot be certain.Maintaining a Strategic Reserve:
The treasury also acts as a financial safety net. This supports Cardano's long-term innovation and security and is referred to in the Constitution. Reducing its funding could limit the network's ability in responding appropriately to needs and opportunities. - No308.2K ₳No rationale
- No297K ₳Rationale
We have just unlocked the treasury. This is an exciting yet uncertain time. Many in the Cardano community are concerned that their taxes will be wasted. I share these concerns, which is why I chose to become a dRep. However, the treasury is one of the most powerful aspects of the Cardano ecosystem and must not be undermined.
Cardano does not exist solely for its current users. It exists for all of humanity, current and future. It is our responsibility as stewards in these early days to ensure our network continues to improve. Maintaining, growing, and spending our treasury responsibly is not only a matter of personal benefit; it is a sacred duty we owe to our children and our children’s children.
This proposal, which I am voting to reject, postulates that a 10% tax would suffice due to an expected appreciation in the value of Ada and that decreasing the tax from 20% would benefit the decentralization of the network by encouraging more participation in consensus.
Basing such a critical decision on price speculation is not only unreasonable but dangerously short-sighted.
Decentralization could always be improved; however, it is not the only consideration. As we are currently among the best in class when it comes to decentralization, we should be careful not to prioritize it above other critical considerations. As this proposal would halve the current contributions to the treasury, it has the potential to inhibit our long-term viability.
Our duty as stewards of the treasury is not to drive the price of Ada higher, but to shepherd Cardano through each challenge the future brings. Let us not become distracted by personal gain. May we keep sight of the opportunity granted to us—that we might change the course of human history and deliver all of mankind to a truly trustless world.
Signed William Doyle
Your friendly neighborhood DRep!
$computerman
drep1yfpgzfymq...pzw3nt - No291.8K ₳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%.
- Yes285.2K ₳No rationale
- No275.2K ₳Rationale
At present, I see no justification to adjust any network parameters.
Until such time that Cardano realizes it initial vision with all network and support structures being completed or there are unforseen, extenuating circumstances introduced that threaten Cardano's existance, I will vote no to any and all parameter changes.
My development approach remains the same - First make it work, then make it pretty, then make it popular, then make changes.