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.
- Yes820.1K ₳No rationale
- No798.4K ₳No rationale
- Yes794.5K ₳No rationale
- No776.8K ₳No rationale
- Yes763.4K ₳No rationale
- Abstain763.4K ₳No rationale
- YesChanged759K ₳History
Earlier votes
No1y agoSuperseded
- No731.5K ₳No rationale
- Yes717.5K ₳No rationale
- No707.1K ₳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.
- No705.1K ₳Rationale
While I support Tax Cuts to the United States Federal government, I do not support tax cuts at this time for Ada transactions. Firstly, Ada does not have bureaucrats laundering transaction money to themselves. We have very little corruption, because of the automated nature of this software. There is one formula which sends a portion of every transaction fee to the treasury. The treasury is controlled by We The Holders. The treasury will fund updates to this software forever. At this early juncture, We must ensure that the treasury grows at the current rate. Ada is still very cheap in comparison to the prices of peak bull run, and into the long term future. I can see tax cuts then, but not now. Your point of \"At higher ADA prices, the treasury retains substantial purchasing power even with a reduced cut\", inherently confirms that this cut slashes the purchasing power of the treasury in half, at a time when Ada is just barely over 20 Billion $ market cap. We should keep the tax where its at, which is still low and fair for all, so that the treasury grows twice as fast as it would if we slash it in half. Then if we achieve a 10x in market cap, the treasury will be substantially larger. At that time we can consider tax cuts. PS. Looking forward to a Midnight and Bitcoin partnership <3 PSS- Thank you for delegating to me!
- Yes660.1K ₳No rationale
- Yes652.3K ₳No rationale
- No652.1K ₳No rationale
- No625.9K ₳No rationale
- No616.3K ₳Rationale
Reducing the treasury tax from 20% to 10% threatens the long-term sustainability of the Cardano ecosystem. The current tax ensures stability by funding future growth and development. Cutting it primarily benefits large stake pools while limiting the treasury’s ability to support innovation and resilience in an uncertain future.
The treasury is a key mechanism for decentralization and sustainability, fueled by transaction-based contributions that reflect active ecosystem engagement. Weakening its replenishment risks concentrating governance power in a few wallets, reducing meaningful circulation and long-term viability. - Yes605.7K ₳No rationale
- Yes590.5K ₳No rationale
- Yes545.4K ₳No rationale
- No533.9K ₳No rationale
- No520.2K ₳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.
- No502.6K ₳No rationale
- No501K ₳No rationale
- Yes478.4K ₳No rationale
- Yes478.3K ₳No rationale
- No467.8K ₳No rationale
- No466.2K ₳No rationale
- No450.2K ₳No rationale
- No442.9K ₳No rationale
- No431.7K ₳No rationale
- Yes414.2K ₳No rationale
- Yes409.7K ₳No rationale
- Yes409.1K ₳No rationale
- Yes389.1K ₳No rationale
- Yes387.4K ₳No rationale
- No385.2K ₳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. - No383K ₳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.
- YesChanged381.1K ₳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!
- Yes365.7K ₳No rationale
- No353.1K ₳No rationale
- No341.7K ₳No rationale
- No332.3K ₳No rationale
- No328.9K ₳No rationale
- Yes325.4K ₳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.
- Yes323.5K ₳No rationale
- Yes323.2K ₳No rationale
- No320.4K ₳No rationale
- 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.
- No313.4K ₳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. - No298.9K ₳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
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