IO & Midgard Labs: L2 Scalability Initiative
239 DReps voted · 88 with a rationale · 12 changed their vote
Open a row to read the rationale.
- Yes2.1M ₳Rationale
I voted YES on the IO & Midgard Labs L2 Scalability Initiative because Cardano needs credible L2 infrastructure alongside L1 scaling to compete for high-performance applications such as DeFi, AI micropayments, gaming, and consumer payments. The proposal funds shared L2 infrastructure, Hydra production hardening, and Midgard’s path to mainnet, giving Cardano a broader scaling portfolio rather than relying on a single approach. I recognise the valid concern that these workstreams could have been separated because they carry different maturity and risk profiles. However, the ask is modest relative to the potential ecosystem benefit, remains within the Net Change Limit, and supports adoption, throughput, TVL, and protocol revenue.
- NoChanged2.1M ₳History
Earlier votes
Yes2mo agoSuperseded
- Yes2M ₳No rationale
- Abstain2M ₳No rationale
- Yes2M ₳No rationale
- Abstain1.9M ₳No rationale
- Yes1.9M ₳No rationale
- No1.8M ₳Rationale
Although Layer 2 infrastructure is a crucial piece of the puzzle for Cardano to achieve sub-1-second transaction completion times, we firmly vote NO.
The core reason lies in the financial risk structure of the proposal. Combining three completely different projects (Data Availability infrastructure, Hydra, and Midgard Rollup) into a single 10.4 million ADA funding round is a risky approach. Midgard is particularly risky because it is still in its early testing phase. Requiring Cardano's Treasury to bear the entire commercialization risk for a L2 project goes against industry practice – where L2 projects typically raise their own venture capital (VC) funding due to their enormous profit potential.
Furthermore, given the network's current tight budget, allocating over 27 million ADA to upgrade its L1 core (Ouroboros Leios), the Treasury cannot be seen as an unlimited "money printing machine." This proposal needs to be vetoed to force the development team to break down the project into smaller components, become partially financially independent, and make a more transparent revenue-sharing commitment with Cardano before seeking funding again.
- Yes1.8M ₳No rationale
- Yes1.8M ₳Rationale
Scaling is one of Cardano’s remaining challenges. While Leios will deliver a faster L1, certain use cases need even faster settlement and lower fees. I support this proposal’s funding of Hydra and Midgard, as they are Cardano’s two most promising scaling solutions.
- Yes1.7M ₳No rationale
- Yes1.7M ₳Rationale
Midgard is still necessary, regardless. Several businesses are waiting on it.
- Abstain1.6M ₳No rationale
- Yes1.6M ₳Rationale
IOG certainly asks for a lot, although some of the proposals are collaborations with other companies. I will go over the different proposals separately.
✅ Developer Experience
It’s important that developers who want to build on Cardano can do so as easily as possible. While I think this proposal could be done more cheaply, not getting it done would be much worse.✅ Cardano Upgrades
These upgrades will be beneficial for Cardano.✅ Consensus
Implementing Leios is important to handle the transaction volume we’ll have once Cardano is used for many use cases. I would have preferred to see Simple Leios implemented directly (with a longer time frame), though, rather than first spending time and resources on Linear Leios.✅ L2 Scalability
We need solid L2 solutions for high transaction volume applications that would be too expensive on L1 (in terms of resources and fees).❌ Cardano High Assurance
I like this proposal, but unfortunately, under the current available NCL and taking other proposals into account, difficult choices need to be made. I will approve this proposal if it is resubmitted under a new NCL.✅ Cardano Maintenance
This proposal is too expensive for what it delivers, but alternative nodes are not yet mature enough to risk stalling the development of cardano-node.✅ Plutus
Further improvements and extensions of smart contract capabilities are important.➖ Blockfrost
I think the free tier should be subsidized by the revenue Blockfrost generates from its paid tiers, like any other company using a freemium model. I do recognize the decentralization efforts made, although funding for this was already received in the past; hence I will abstain.➖ Pogun
There are multiple alternatives for Bitcoin DeFi on Cardano being developed, and it remains to be seen which one will perform best and attract the most users. The treasury should not provide a grant for this, but since the earnings would be used to repay the funds, it is essentially a loan. Given that additional revenue would later be shared with the treasury, it could even be considered an investment. However, I am not sure whether the current NCL allows for this kind of investment at the moment. If a higher NCL becomes available, I would vote in favor of this proposal, but for now I will abstain. - Yes1.6M ₳No rationale
- Yes1.4M ₳No rationale
- Yes1.4M ₳No rationale
- Yes1.4M ₳No rationale
- No1.4M ₳Rationale
Vote Rationale — No
I agree with the broader premise that Cardano needs scalable infrastructure and that L2 development is strategically important. However, after reviewing the proposal, I am not sufficiently convinced by the maturity and readiness of the Midgard component to support treasury funding at this stage.
My concerns are not about the ambition of the vision, but about the gap between the claims being made and the level of demonstrated validation currently available. The proposal presents Midgard as a key piece of Cardano’s scaling future, yet several critical aspects are still either unresolved, lightly specified, or acknowledged as major risks within the proposal itself.
I also believe the proposal relies heavily on projected future adoption and ecosystem benefits rather than demonstrated demand or proven production traction today. For a treasury request of this scale, I would expect clearer evidence that the architecture, operational model, and ecosystem fit have already passed a stronger level of validation.
This should not be interpreted as opposition to L2 experimentation or to the teams involved. I appreciate the technical effort and believe continued research in this direction is valuable. However, I do not currently have enough confidence in the Midgard workstream specifically to justify supporting the proposal in its present form.
- No1.4M ₳No rationale
- Yes1.3M ₳No rationale
- Yes1.2M ₳No rationale
- Yes1.2M ₳No rationale
- Yes1.1M ₳No rationale
- No1.1M ₳Rationale
Scalability is strategically necessary for Cardano, but “necessary category” does not automatically mean “this specific withdrawal is justified.”
Cardano needs credible L2 capacity if it wants to compete for DeFi, AI-agent micropayments, gaming, and consumer-scale applications. There’s no question about it. Hydra and Midgard also address different trust models, so the architectural argument is coherent and strong.
However, the value proposition itself is overpackaged and under-proven at the high-level proposal stage. The proposal asks for ₳10M while blending three very different objectives: shared L2 infrastructure, Hydra hardening, and Midgard’s path toward production. In my book, public-good infrastructure, maintenance of prior IO research, and acceleration of a specific rollup venture must not be blurred into one treasury-funded narrative.
**Much of the near-term justification for funding this proposal is anchored to specific adopters and specific teams. **Delta DeFi, Masumi, and Midgard may be important, but treasury funding must not become a rescue mechanism for projects whose business cases depend on subsidized infrastructure. If the market urgently needs this, I expect stronger proof of independent demand, committed adoption, open standards, and non-extractive ecosystem benefit.
- Yes1M ₳No rationale
- Yes964.1K ₳No rationale
- Yes955.7K ₳Rationale
Required for improving the finality and to be considered for Defi adoption, 2 hours of finality is not acceptable for any network.
- Yes949.1K ₳No rationale
- Yes931.8K ₳No rationale
- Yes861.5K ₳No rationale
- Yes829.2K ₳No rationale
- Yes825.2K ₳Rationale
Our core mandate as a DRep is to prioritize blockchain security, scalability, and long-term ecosystem resilience. Scaling through structured L2 infrastructure is no longer a luxury; it is a critical requirement for global competitive positioning. By partnering core developer competencies (IO) with proven infrastructure ecosystems (Midgard Labs), this initiative balances immediate capital expenditure with robust technical feasibility. The long-term scalability gains directly outweigh the short-term reduction in Treasury assets, making a YES vote the most responsible path toward safeguarding Cardano's operational longevity.
This governance action significantly impacts the Latin American Cardano ecosystem by preparing the underlying network infrastructure to support mass tokenization, public administration, and retail finance platforms. High-throughput scaling ensures that local builders and institutions in Latin America can deploy real-world solutions without facing prohibitive transaction fees or network latency during peak utilization periods.
- Yes798.6K ₳Rationale
ZK rollups are the stronger long-term architecture, but a production-ready ZK rollup verifier on Cardano L1 does not exist today and is not on a near-term delivery timeline. The choice in this cycle is between an optimistic rollup and no permissionless L2 at all. Delta DeFi and Masumi are building production systems on Hydra right now. Voting No to wait for ZK leaves active ecosystem builders without the infrastructure they have already committed to. This vote supports what is available and viable today while the ecosystem works toward stronger primitives.
- Yes798.4K ₳Rationale
L2 is not optional — L1 alone (even with Leios/Peras) cannot meet latency + cost requirements for real adoption.
Dual approach (Hydra + Midgard) correctly covers both closed and permissionless environments → full market coverage.
Strong near-term ROI via existing demand (Delta DeFi, Masumi) → reduces execution-to-adoption gap.
Treasury capture via sequencer economics is structurally important → aligns L2 growth with L1 value accrual.
Main risk is Midgard complexity and DA design uncertainty, but budget is relatively small vs upside. - No794.5K ₳Rationale
Sounds great, but I don't care. IO was funded during the last major Intersect budget cycle with a long list of deliverables. Why wasn't all of this in competition for funding at that time if it was so bloody important. I'm not interested in cutting any more big checks from the Treasury with ADA at these price levels. Get your shit together and tell us what you want to accomplish as part of the primary budget cycle.
- Yes763.4K ₳No rationale
- No759K ₳No rationale
- No719K ₳Rationale
I am voting NO on this proposal.
L2s on ETH have had a big share of failure related to sustainability. In addition, even Cardano's today slow TPS is not resulting in fully filled blocks. Cardano lacks usage, not more tech. Lets invest money or usage not infra and scale WHEN needed.
A PDF version of this rationale is also made available.
I am voting NO on this proposal.
L2s on ETH have had a big share of failure related to sustainability. In addition, even Cardano's today slow TPS is not resulting in fully filled blocks. Cardano lacks usage, not more tech. Lets invest money or usage not infra and scale WHEN needed.
- Yes705.1K ₳Rationale
I’m voting yes because this proposal strengthens the foundations needed for Cardano to compete in the next wave of AI-driven, high-frequency on-chain activity. The maintenance initiative ensures the base layer stays secure, stable, and continuously improved, while the L2 initiative (including Hydra and Midgard) unlocks the performance needed for sub-second, low-cost transactions that today’s applications require. Most importantly, this is about positioning Cardano for an “agent economy” where AI agents will be constantly transacting, routing value, and interacting with smart contracts. Without scalable L2s and reliable core maintenance, that level of automated economic activity can’t realistically run on-chain—but with them, it becomes a growth engine that feeds back into L1 usage and ultimately strengthens treasury sustainability over time. We must enter the singularity, ready.
- Yes652.3K ₳Rationale
Scalability and cheaper tx's needs to happen. Especially with full scale leios and peras not being implemented until 2028ish. But this is the last time I am funding anything Hydra.
- Yes625.9K ₳Rationale
Total ask: ₳10,425,871
Development: ₳8,966,249 = 86%
WS1 L2-Agnostic DA: ₳1,895,613 ($455K)$1.82M)
WS2 Hydra Production: ₳7,582,452 (
WS3 Midgard Mainnet: ₳947,806 (~$227K)
FTE estimate: $2.15M dev ÷ ~8–10 specialist L2 engineers ÷ 7.5 months × 12 ≈ $344–430K/yearA PDF version of this rationale is also made available.
I'm voting yes because Cardano has a competitive gap that L1 upgrades alone won't close, and this proposal addresses it with solutions that already have live production commitments behind them.
The problem is precise: Cardano L1 delivers over two hours of finality at $0.17 per transaction. Competing platforms deliver sub-2-second finality at sub-cent fees. High-performance applications like DeFi, AI agent micropayments, and gaming don't evaluate Cardano's security model or eUTxO architecture because they've already self-eliminated before reaching that stage. This proposal builds the infrastructure that moves Cardano past that pre-selection filter. Hydra handles known-party, high-frequency environments; Midgard handles open, permissionless participation. These are different trust models serving different use cases, and the proposal makes a credible case that supporting only one leaves a meaningful gap.
At ₳10,425,871 (~$2.5M at $0.24) with 86% to development and transparent per-workstream budget allocation, this is competitive for what's being attempted. Three things align directly with my priorities, the L2-agnostic data availability strategy is shared infrastructure for every current and future Cardano L2, this is essential in solving the problem once rather than once per project. Masumi's machine-to-machine micropayment infrastructure on Hydra is exactly the kind of AI agent use case Cardano should be enabling, not ceding to Solana. And Midgard's architecture explicitly routes a portion of L2 sequencer revenue back to the Cardano treasury, this will be a non-speculative, ongoing revenue stream aligned with the long-term fiscal sustainability that a shrinking reserve makes necessary.
The risk table is honest about what's hard. Midgard's transition from single-sequencer testnet to multi-operator coordination is rated "High" likelihood and "High" severity, it's on the critical path, and full mainnet production is scoped to a subsequent proposal cycle. The DA architecture selection risk is real: a wrong architectural choice creates technical debt for all Cardano L2s. The Stage 1 evaluation before Stage 2 commitment, with community input required, is the right process discipline. These risks are accounted for in the phasing dispersal; and they don't change the vote. Confidence in their utilization of the standard milestone-based Intersect governance processes. - No605.7K ₳Rationale
MY VOTE — NO. REJECTED.
Another request for money from the Cardano treasury.
This time they are asking for ₳10,425,871 for L2 scaling: Hydra, Midgard, and shared Layer 2 infrastructure.
On paper, everything looks beautiful:
Hydra,
Midgard,
Data Availability,
fast transactions,
low fees,
DeFi,
AI payments,
gaming,
consumer applications.But I have one simple question:
Where are the results from the money that was already taken before?
If large funding was already received, then first they must show:
what has been completed,
what is actually working,
which products were finished,
which metrics were achieved,
what real benefit ordinary Cardano users have already received.Not come back to the treasury again asking for millions more ADA under new promises.
Cardano must not become an endless cash machine for the same structures.
First finish the old work.
First show the result.
First deliver a working product.
Then new proposals can be discussed.My position as a DRep is simple:
I vote NO. Rejected.
I am not against Cardano development.
I am against constant funding without clear accountability and completed results.I registered as a DRep and I am ready to help shape the future of the ecosystem. - Optimistic about building the largest digital community in the world. 🖤 My DRep ID: ➡️ drep1y269ehxj30k4vfzfc2z84v0xykd3amuy2xn0kv9zf8rhcec2fg2jr More details here https://t.me/PROCENT666/338
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- Yes589.7K ₳Rationale
On the path towards Crypto Eating Legacy. Yes!
- No535.2K ₳Rationale
While Phil is an excellent developer, he is stretched too thin and being involved in too much controversy lately.
Additionally I do not believe this work should be under IOG, IOG is our star development firm and should be protected from being stretched too thin, or centralizing too much of the Cardano stack around them.
I would support a renewed proposal from Midgard labs, with Midgard Labs being in the driver seat, at a later date
- No533.9K ₳Rationale
Leios is what is critical now for scalability for the main chain. With Gummi worm and Hydra this takes a step back for absolute critical infrastructure. The midgard labs team is highly competent but once again considering the fiscal nature of the treasury, must be held off for now.
- Yes527.5K ₳No rationale
- Yes501K ₳Rationale
I’m voting yes because after actually doing my research, I found that a lot of the “Midgard has delivered nothing” narrative is simply not accurate.
They have delivered meaningful work already.
Through previous Catalyst funding, they completed major foundational milestones including architecture specifications, protocol smart contract specifications, state management contracts, node infrastructure, and functional prototype progress. There is active open-source development, real technical work, and clear evidence that this is not a project starting from zero. The issue, in my view, is less about delivery and more about communication. Because Midgard is still pre-mainnet and not yet publicly battle-tested, many people understandably look at the treasury ask and feel like they are being asked to fund promises rather than proven infrastructure. I think a large part of that perception comes from the fact that much of the progress is buried in technical repos, milestone trackers, and builder conversations rather than being clearly communicated to the wider governance community.
This proposal is also bigger than just Midgard alone. It includes shared L2 infrastructure, Hydra production hardening for projects already building on Cardano, and Midgard’s path to mainnet. That broader context matters. Cardano needs serious L2 infrastructure if we want to remain competitive for DeFi, gaming, AI micropayments, and other high-performance use cases. Hydra and Midgard solve different problems and both are important for ecosystem growth.
I believe this is the right strategic direction for the ecosystem, and I do not think treasury should wait until everything is already finished before supporting critical infrastructure.
For me, this is a yes vote because I see real prior work, real ecosystem need, and strong long-term value for Cardano. My hope is that if funded, the team improves communication and transparency significantly. When public treasury funds are involved, technical delivery alone is not enough. The community also needs visibility and clear accountability. - No499K ₳Rationale
Leios should deliver higher TPS
A PDF version of this rationale is also made available.
Leios should deliver higher TPS
- Yes487.7K ₳No rationale