IO: Hydra
5 of 7 committee members voted
- Ace Alliance71aa5b3a…8f04YesActive · term ends epoch 726Rationale
Ace Alliance finds the proposed "IO: Hydra" Treasury Withdrawals Governance Action constitutional. Rationales are archived at https://github.com/ace-alliance/ace-voting/
A PDF version of this rationale is also made available.
"IO: Hydra" (4f6e5df9a6e14b...0d47#0) 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 TWGA seeks to withdraw 5,100,781 ada from the Cardano Treasury to fund continued development of Hydra v2 across four workstreams: performance optimization, operational excellence, ecosystem support, and developer experience. The proposer is Input Output (IO), which is an IOG-adjacent entity; the work this Action funds is directed by IO and administered by Intersect under the Intersect Treasury Reserve Smart Contract framework. We apply identical scrutiny to this Action as we would to any other Treasury Withdrawal regardless of the proposer's institutional connections.
Article II.6's procedural standards are satisfied. The action anchors to an IPFS-hosted document with the on-chain blake2b-256 hash 63c39f9f8f03cb38e3f465b8e338a5ea0c2cb148c6d38bb01b88d52934cc71f3, a content-addressed form that is immutable once posted, and the metadata supplies the title, abstract, motivation, rationale, budget breakdown, milestone-gated delivery structure, and supporting references that Article II.6.2 requires. Article II.7.1's terms-of-withdrawal requirement is met by the proposal's specification of purpose (the four Hydra v2 workstreams), milestone-gated delivery schedule, itemized costs by workstream and category including 51,008 ada for Security and Audits, and refund conditions (all funds not disbursed by the end of the delivery period return to the Cardano Treasury, with proportional return for cancelled or reduced deliverables). Article II.7.2's disclosure requirement is satisfied through a detailed tabular breakdown of prior treasury receipts by IO and its affiliated entities: 130,708,860 ada in total allocations across Blockfrost, Catalyst, IOE, IOR, and Governance workstreams, with 84,909,073 ada withdrawn to date, each disclosed alongside its corresponding on-chain Governance Action identifier. Article II.7.3 is satisfied because the 5,100,781 ada requested here is well within the 350,000,000 ada Net Change Limit currently in force for the period spanning epochs 613 through 713.
Articles II.7.4, II.7.5, and II.7.6 are satisfied through the Intersect-administered Treasury Reserve Smart Contract pattern previously found constitutional by this Committee. Under Article II.7.5, the proposal designates Intersect as administrator, operating the Sundae-Labs-audited TRSC framework with Project-Specific Smart Contracts. An Oversight Committee of five external, independent third-party entities provides the checks against unilateral administrative control, with explicit multi-signature authorization rules for each TRSC action type. A written off-chain Legal Contract between Input Output and the Cardano Development Holdings, administered by Intersect, governs the project delivery schedule and dispute resolution, and milestone acceptance is supported by a third-party assurer funded as part of this withdrawal. Under Article II.7.4, the proposal allocates audit and oversight costs within the overhead applied to the request, with the Security and Audits line item, the Intersect administration fee covering administrative oversight, and the third-party assurer cost for milestone acceptance, and commits to Intersect's reporting obligations, milestone-based disbursement controls, and a public on-chain dashboard for community auditing of TRSC and PSSC activity. Under Article II.7.6, the on-chain withdrawal destination is stake17xzc8pt7fgf0lc0x7eq6z7z6puhsxmzktna7dluahrj6g6ghh5qjr, which is a script-locked stake address (CIP-19 mainnet header byte 0xf1) controlled by Intersect, is not delegated to any stake pool, and is delegated to the predefined always-abstain DRep at the time of submission.
Ace Alliance finds the proposed "IO: Hydra" Treasury Withdrawals Governance Action constitutional.
- Cardano Curia84feba94…6bd5YesActive · term ends epoch 799Rationale
Cardano Curia finds the IO: Hydra Treasury Withdrawal governance action constitutional.
Determination
Cardano Curia finds the IO: Hydra Treasury Withdrawal governance action constitutional.
Purpose and scope
The proposal requests 5,100,781 ada to support continued development and production hardening of Hydra. The funded programme covers performance optimisation, operational excellence, ecosystem support and improvements to developer experience.
The intended effect is to strengthen Hydra as scalable Layer 2 infrastructure for Cardano applications.
Governance action standards
The proposal identifies a legitimate and defined treasury purpose and provides a stated funding amount, bounded workstreams, milestone-based delivery, administration arrangements and independent delivery assurance.
These materials provide sufficient information to understand what is being funded and how delivery will be assessed.
Treasury Withdrawal requirements
The proposal provides defined workstreams, relevant costs, milestone-gated delivery, treasury administration and independent assurance.
Intersect is designated as administrator, providing separation between the delivery team and treasury custody. The Treasury Reserve Smart Contract and project-specific contract framework support controlled disbursement, public traceability and reconciliation.
The proposal includes mechanisms for oversight, delivery verification, refund or reconciliation of unused funds and auditable custody. Funds held by the administrator are not to be delegated to a Stake Pool Operator and are to use the predefined abstain voting option.
Constitutional assessment
Cardano Curia finds that the action adequately addresses the applicable Treasury Withdrawal standards concerning purpose, delivery scope, relevant costs, administration, independent assurance, oversight, refund conditions and auditable custody.
Questions concerning Hydra adoption, the likelihood of achieving every performance target or whether this initiative is the highest-priority use of treasury funds are policy and value-for-money questions for DReps and ada owners. They do not establish a conflict with the Constitution.
Cardano Curia identifies no constitutional violation.
Cardano Curia finds the action constitutional. It provides a defined infrastructure purpose, bounded workstreams, milestone-based delivery, independent assurance, treasury administration and auditable custody arrangements.
- Cardano Japan Council725d4d44…7b31YesExpired · term ends epoch 653Rationale
We consider this governance action to be constitutional.
This proposal is a Treasury Withdrawal Governance Action to withdraw ₳5,100,781 from the Cardano Treasury for "IO: Hydra" by Input Output. With regard to Article 2, Section 6, Paragraphs 1 and 2 of the Cardano Constitution, this proposal adopts an immutable off-chain reference using IPFS. Furthermore, the proposal text includes the title, summary, rationale, justification, deliverables, roadmap, budget, contract management, and audit and oversight framework; we therefore determine that it presents information sufficient for evaluation as a Governance Action. Regarding Article 2, Section 7, Paragraphs 1 and 2 of the Cardano Constitution, the proposal outlines the purpose, implementation details, implementation period, cost breakdown, and repayment conditions of the Treasury Withdrawal. Furthermore, under the "Prior Treasury Receipts" section, the proposal discloses the history of past Treasury receipts and related withdrawal records from the Treasury. Regarding Article 2, Section 7, Paragraph 3, it is clearly stated that the requested amount for this proposal is ₳5,100,781 and falls within the 350M ADA Net Change Limit applicable to Epochs 613-713 at the time of submission. Furthermore, the requested amount for this proposal is stated in ADA, and the USD equivalent is provided for reference only. Article 2, Section 7, Paragraphs 4 and 5 describe the audit and oversight framework, including third-party guarantees, audits, reporting obligations, and the Oversight Committee, and designate Intersect as the entity responsible for managing the Treasury. It also states that a legal agreement will be entered into between Input Output and Cardano Development Holdings (CDH), with Intersect managing that agreement. Furthermore, Article 2, Section 7, Paragraph 6 describes the use of the Treasury Reserve Smart Contract (TRSC) and the Project Specific Smart Contract (PSSC) for segregated management; a structure designed to enable community auditing; non-delegation to an SPO; and delegation to auto-abstain DRep. We determine that this structure is intended to satisfy the requirements that it "can be audited by the Cardano Community," uses "separate accounts," is "not delegated to an SPO," and is "delegated to the predefined abstain voting option." Therefore, as no clear conflict with the Cardano Constitution has been identified, we determine that this proposal is constitutional.
For the reasons stated above, we determine that it is constitutional.
- Eastern Cardano Council2ea7a78e…10ecYesActive · term ends epoch 726Rationale
We have determined that this treasury withdrawal governance action is constitutional.
The governance action with ID "gov_action1fah...tcm6ry" and title "IO: Hydra" is a Treasury Withdrawal, and is therefore subject to the following sections and guardrails in the Cardano Constitution.
ARTICLE II, Section 6 of the Cardano Constitution states that governance actions must follow a standardized and legible format, including a URL hosting an immutable document and a corresponding hash, and must provide sufficient rationale including a title, abstract, justification, and supporting materials.
This governance action includes a valid URL and hash, which matches the hash of the off-chain documentation referenced. The rationale also meets the minimum content specified in this section.
ARTICLE II, Section 7 specifies that Treasury Withdrawal governance actions must include the following:
1. Purpose, Delivery Period, Costs, and Refund Conditions
This governance action specifies:
- The purpose of the withdrawal as "This proposal funds four workstreams - performance optimization, operational excellence, ecosystem support, and developer experience - delivering a feature-complete and hardened Hydra v2 so we offer a competitive scaling solution to existing builders and new builders adopt Cardano."
- The period for Hydra Maintenance & DevX (under Deliverables and Roadmap), as being Q3-Q4 2026. The other 3 items do not include a delivery period, however it could be implied that they will be implemented prior to or during the Hydra Maintenance & DevX period. We would recommend that future governance actions be more explicit in specifying the period for all deliverables.
- The relevant costs and expenses in the "Funding Distribution" table under the "Budget" heading.
- The circumstances under which funds may be refunded to the Cardano Treasury as "All funds not disbursed by the end of the delivery period will be returned to the Cardano Treasury. A final reconciliation will be published as part of the oversight reporting cycle. In the event of partial delivery or scope reduction, unspent funds associated with cancelled or reduced deliverables will be returned proportionally."
These elements fulfil the requirements of Article II, Section 7(1).
2. Prior Treasury Funding Disclosure
ARTICLE II, Section 7(2) requires disclosure of whether the prospective recipient has received ada from the Cardano Treasury within the last 24 months.
This governance action states that "IO and its affiliated entities have been accountable for the delivery of work funded by the Cardano Treasury. The total funds allocated have been ₳130,708,860 across a number of projects within Treasury Smart Contract.". This fulfils the requirement of ARTICLE II, Section 7(2).
3. Net Change Limit (NCL)
ARTICLE II, Section 7(3) requires that Treasury Withdrawals must not exceed the Net Change Limit.
The Net Change Limit in effect at the time of submission of this vote on-chain is the governance action with ID "gov_action1m3x...4jsr7q".
- A. Current NCL Amount: 350000000 ada
- B. Current NCL Time Period: Epoch 613 to Epoch 713 (Inclusive)
- C. Total of Treasury Withdrawals within the Current NCL Time Period: 291435336 ada
- D. Amount of this Treasury Withdrawal: 5100781 ada
- E. "C" plus "D" = 296536117 ada
- F. "A" minus "E" = 53463883 ada
As the value of "F" is greater than or equal to zero, this governance action fulfils the NCL requirement.
4. Audit Allocation and Oversight Metrics
ARTICLE II, Section 7(4) states "Treasury Withdrawals actions shall require an allocation of ada as a part of such funding request to cover the cost of periodic independent audits and the implementation of oversight metrics as to the use of such ada."
This governance action states that "Audit and oversight costs are included within the overhead applied to this proposal. The Intersect administration fee covers administrative oversight and is reflected within the cost of this proposal. Independent oversight will be provided through Intersect and a technically capable third party, including reporting obligations and milestone-based disbursement controls.", which fulfils the requirements of ARTICLE II, Section 7(4).
5. Designated Administrators
ARTICLE II, Section 7(5) requires that one or more administrators are designated to monitor fund usage and ensure deliverables are achieved.
This governance action states that "A written off-chain Legal Contract will be created between Input Output and the Cardano Development Holdings (CDH), as mandated by the Constitution, and will be administered by Intersect.", which fulfils this requirement.
6. Fund Management Requirements
ARTICLE II, Section 7(6) states "Any ada received from a Cardano Blockchain treasury withdrawal, so long as such ada is being held by an administrator prior to further disbursement to the Treasury Withdrawal Recipient, must be kept in one or more separate accounts that can be audited by the Cardano Community, and such accounts shall not be delegated to an SPO but must be delegated to the predefined abstain voting option."
This governance action specifies the following withdrawal address, which at the time of assessment is not delegated to an SPO and is delegated to the auto abstain voting option:
- stake17xzc8pt7fgf0lc0x7eq6z7z6puhsxmzktna7dluahrj6g6ghh5qjr
Finally, the guardrails that require consideration for this governance action are TREASURY-01a, TREASURY-02a, and TREASURY-03a. These are addressed as follows:
- TREASURY-01a - The net change limit with governance action ID "gov_action1m3x...4jsr7q" is currently in effect, after being "agreed by the DReps via an on-chain governance action with a threshold of greater than 50% of the active voting stake".
- TREASURY-02a - As per the above assessment, this treasury withdrawal does not exceed the current Net Change Limit.
- TREASURY-03a - This treasury withdrawal is denominated in ada.
We therefore find this governance action Constitutional.
This governance action sufficiently fulfils the criteria specified for treasury withdrawals in the Cardano Constitution, so is deemed constitutional.
- Tingvard646d1b3a…be43YesActive · term ends epoch 726Rationale
Tingvard judges the “IO: Hydra” Treasury Withdrawal governance action constitutional.
This governance action requests ₳5,100,781 from the Cardano Treasury to fund Hydra development, performance optimization, operational excellence, ecosystem support, maintenance, and developer experience work.
The proposal identifies the purpose of the withdrawal, the delivery scope, the requested amount, and the budget categories. It describes four main workstreams: performance optimization, operational excellence, ecosystem support, and maintenance and developer experience.
The proposal also provides a delivery and administration structure. A written off-chain legal contract will be created between Input Output and Cardano Development Holdings and administered by Intersect. The proposal states that milestones, acceptance criteria, payment amounts, and expected delivery dates will be agreed in the legal contract and made public through the budget management platform.
The proposal includes milestone-based delivery, third-party assurance, Intersect delivery assurance, and administrative treasury governance through Intersect. It also states that work acceptance will be supported by a third-party assurer responsible for reviewing and signing off completed work against the milestone deliverables.
The proposal addresses treasury fund custody and delegation. Funds will be administered through Intersect’s treasury management smart contract framework, using a Treasury Reserve Smart Contract and Project-Specific Smart Contracts. The proposal states that these contracts cannot be staked with an SPO and will be delegated to the auto-abstain predefined DRep.
The proposal identifies an oversight structure. Intersect will manage the treasury contracts, while an Oversight Committee consisting of five external independent third-party entities will provide checks and balances on certain administrative actions. The proposal describes permission structures for funding, modifying, dispersing, pausing, resuming, sweeping, and reorganizing treasury funds.
The proposal also provides refund conditions. Funds not disbursed by the end of the delivery period will be returned to the Cardano Treasury, and in the event of partial delivery or scope reduction, unspent funds associated with cancelled or reduced deliverables will be returned proportionally.
The proposal discloses prior treasury funding received by IO and affiliated entities, including total allocated funds and amounts withdrawn to date. It also states that the requested amount does not breach the applicable 350M Net Change Limit.
Tingvard therefore finds that the proposal satisfies the relevant requirements for a Treasury Withdrawal governance action.
Tingvard finds the “IO: Hydra” Treasury Withdrawal governance action constitutional.
The proposal provides a clear purpose, budget, delivery structure, administrator, oversight model, milestone-based assurance, prior funding disclosure, NCL compliance, and refund conditions.
Tingvard therefore judges this governance action constitutional.
- KtorZ64f97568…3a49Not votedExpired · term ends epoch 653No rationale
- Phil_uplc68bb0b42…8746Not votedActive · term ends epoch 799No rationale