Net Change Limit: Cardano Treasury (Epochs 613-713)
7 of 7 committee members voted
- 68bb0b42…874668bb0b42…8746YesActive · term ends epoch 653No rationale
- Ace Alliance71aa5b3a…8f04YesActive · term ends epoch 726Rationale
Ace Alliance finds the proposed "Net Change Limit: Cardano Treasury (Epochs 613-713)" Info Governance Action constitutional. Rationales are archived at https://github.com/ace-alliance/ace-voting/
A PDF version of this rationale is also made available.
"Net Change Limit: Cardano Treasury (Epochs 613-713)" (gov_action15at...hakceq) is an Info Governance Action by which the DReps agree a new Net Change Limit of 500,000,000 ada for the Cardano Treasury for the period beginning at the start of epoch 613 and ending at the close of epoch 713. The new limit supersedes the 350,000,000 ada limit previously agreed for the same period, all Treasury Withdrawals already debited during the period count toward it, and the action records the DReps' agreement when Yes votes exceed 50 percent of the active voting stake, the threshold guardrail TREASURY-01a sets for agreeing a Net Change Limit. The action has no direct on-chain effect and authorizes no Treasury Withdrawal, and whether 500,000,000 ada is the right ceiling for the remainder of the period is a policy question committed to the Cardano Community and its DReps to decide, not to the Constitutional Committee. Our review is confined to the constitutionality of the action and of the outcome it contemplates.
Article II.7.3 and Guardrails TREASURY-01a and TREASURY-02a. The action performs a constitutionally mandated function. Article II.7.3 provides that a Net Change Limit must be set and that Treasury Withdrawals must not exceed it, and Defined Term 7 of the Constitution defines the Net Change Limit as the maximum allowed amount of lovelace that may be removed from the Cardano Treasury in a given period. This action establishes exactly that parameter, 500,000,000 ada, for exactly such a period, epochs 613 through 713, with a precise lovelace-denominated accounting rule under which a withdrawal complies only if the cumulative debited sum does not exceed the limit. Nothing in the Constitution limits the DReps to a single Net Change Limit for a period or prevents a newly agreed limit from applying to it; the agreement mechanism, an Info Action carried by more than 50 percent of active DRep voting stake, is the same mechanism through which the 350,000,000 ada limit it supersedes was agreed, and TREASURY-01a prescribes that mechanism.
Article II.6.1 and II.6.2 (Governance Action Standards). The procedural standards are satisfied. The action anchors to an IPFS-hosted document with the on-chain blake2b-256 hash d420037401626f4db20a255ca52d9d39764f68edfdc02686007cf9c731564f88, a content-addressed form that is immutable once posted, and the metadata supplies the title, abstract, motivation, rationale, and the precise definition, period, calculation, and accounting provisions that make the contemplated limit verifiable against the ledger.
Article III.1.4 (Scope of CC Review). The action appropriately uses the Info Action mechanism, and our review under this Article extends to the constitutionality of the contemplated outcome. The outcome contemplated here, a defined Net Change Limit for a defined period agreed at the TREASURY-01a threshold, is not merely permitted by the Constitution but required by it as the precondition for any further Treasury Withdrawals. We have previously found Info Actions establishing a Net Change Limit for this same period constitutional on this reasoning, and we apply the same framework here.
Ace Alliance finds the proposed "Net Change Limit: Cardano Treasury (Epochs 613-713)" Info Governance Action constitutional. The action performs the Net Change Limit function that Article II.7.3 and guardrail TREASURY-01a require, its metadata satisfies Article II.6, and the level of the limit is a policy judgment reserved to the DReps.
- Cardano Curia84feba94…6bd5YesActive · term ends epoch 653Rationale
Cardano Curia records a majority finding that the Strike Finance Liquidity Deployment Treasury Withdrawal is constitutional, with four constitutional votes and one unconstitutional vote.
What is being proposed
This governance action requests a Treasury Withdrawal of 9,000,000 ada for a twelve-month liquidity deployment associated with Strike Finance V2. The proposal contemplates conversion of ada into USDM, deployment into perpetual-futures liquidity, periodic reporting, and return of realized yield and remaining assets according to the published schedule.
Majority constitutional view
Four Cardano Curia members found the action constitutional. The majority considered that the proposal identifies a defined purpose, delivery period, administrators, segregated custody arrangements, reporting commitments, return mechanics, and independent assurance arrangements. The majority also credited Tingvard-related audit and assurance work as a meaningful safeguard supporting auditability and public oversight.
The majority determined that the action is capable of operating consistently with the Constitution's Treasury Withdrawal standards, provided the published administration, audit, reporting, custody, abstain-delegation, and return-to-treasury commitments remain binding and verifiable throughout execution.
Minority unconstitutional view
One Cardano Curia member found the action unconstitutional. The minority view was that the proposal does not state with sufficient clarity an explicit ada allocation within the withdrawal for periodic independent audits and oversight metrics, as required by the Treasury Withdrawal standards. The minority also considered the capital-preservation, conversion, custody, and mandatory wind-down controls insufficiently precise for a risk-bearing treasury deployment.
Determination
By a vote of four to one, Cardano Curia finds the action constitutional. This determination addresses constitutional compliance and does not guarantee delivery performance, asset preservation, stablecoin solvency, protocol security, or financial return.
Cardano Curia finds governance action 8721696358acdd...dc70#0 constitutional by an internal vote of four constitutional and one unconstitutional, with no abstentions and no members recorded as not voting.
- Eastern Cardano Council2ea7a78e…10ecYesActive · term ends epoch 726Rationale
We have determined that this Info governance action is constitutional.
Article III, Section 1(2) of the Cardano Constitution states "The CC shall be limited to voting on the constitutionality of governance actions, including any proposed or contemplated actions contained within "Info" actions."
The governance action with ID “gov_action15at...hakceq” and title “Net Change Limit: Cardano Treasury (Epochs 613-713)”, as an Info governance action, does not breach any of the tenets or guardrails in the Cardano Constitution, so is deemed constitutional.
We therefore find this governance action Constitutional.
This governance action does not breach any of the tenets or guardrails in the Cardano Constitution, so is deemed constitutional.
- Tingvard646d1b3a…be43YesActive · term ends epoch 726Rationale
Tingvard judges the “Net Change Limit: Cardano Treasury (Epochs 613–713)” Info Action constitutional.
This Info Action proposes that DReps agree a new Net Change Limit of 500,000,000 ADA for the Cardano Treasury, covering the period from the start of epoch 613 to the close of epoch 713.
Under Appendix I, TREASURY-01a, the Net Change Limit must be agreed by the DReps through an on-chain governance action approved by more than 50% of the active voting stake. This Info Action is the mechanism used to record that agreement.
The action clearly states the amount of the limit, the period to which it applies, and how the limit is calculated. It caps the cumulative amount of ADA removed from the Treasury by enacted Treasury Withdrawal governance actions during the stated period.
The action also makes clear that only Treasury Withdrawals actually debited from the Cardano Treasury and recorded on the ledger count toward the limit. Expected, draft, scheduled, unratified, or unenacted withdrawals do not count.
The action states that Treasury inflows, including refunds or returns of Treasury-funded amounts, do not increase the limit. This preserves the Net Change Limit as a fixed cap on Treasury outflows, rather than a floating net balance.
The action further clarifies that Treasury Withdrawals already debited during the period beginning at epoch 613 count toward the new limit. It does not reset, reverse, re-open, or re-authorize any previous Treasury Withdrawal.
Tingvard notes that nothing in the Constitution prevents DReps from agreeing a new Net Change Limit for a period for which a prior limit has already been agreed. Once agreed, this action establishes the applicable Net Change Limit for the stated period.
This action does not itself authorize any Treasury Withdrawal. Future Treasury Withdrawal actions must still be assessed individually against the Constitution and must not exceed the applicable Net Change Limit.
Tingvard finds the “Net Change Limit: Cardano Treasury — Epochs 613–713” Info Action constitutional.
The action uses the correct governance mechanism for agreeing a Net Change Limit, identifies the amount and period, explains how the limit is calculated, and preserves DRep discretion over individual Treasury Withdrawals.
Tingvard therefore judges this governance action constitutional.
- Cardano Japan Council725d4d44…7b31NoActive · term ends epoch 653Rationale
We consider this governance action to be unconstitutional.
Although this proposal is submitted as an Info Governance Action, its content is not merely a statement of opinion. The proposal text designates 500,000,000 ADA as the "applicable" Net Change Limit (NCL) and positions it as a replacement for the 350,000,000 ADA NCL set for the same period. Furthermore, it states that this new NCL will be applied as the criteria for determining future Treasury Withdrawals. The Cardano Constitution maintains fiscal discipline by establishing an NCL for Treasury Withdrawals, and we understand this to be a critical mechanism that embodies TENET 8, "Do not spend resources unreasonably," and TENET 9, "Long-term sustainability and fairness." Therefore, if the value of this NCL—which functions as a fiscal guardrail—is to be changed, the "sufficient rationale" required by Article 2, Section 6, Item 2 of the Constitution becomes particularly important. However, this proposal merely explains that 500,000,000 ADA is necessary because "350,000,000 ADA is beginning to constrain the remaining margin," and provides no basis that can be objectively verified to explain why the figure is specifically 500,000,000 ADA. Furthermore, while this proposal states that it "has no direct on-chain effect," it explains that it will be applied as the "applicable Net Change Limit," taking precedence over the existing NCL. However, in the current Cardano system, the procedures for formally determining, maintaining, and referencing NCL values on-chain are not clear, and it is anticipated that this proposal will effectively serve as the sole basis for its application. Therefore, we believe this Info Action carries normative effects that go beyond mere formality and requires sufficient rational justification commensurate with that significance. Furthermore, retroactively changing the NCL of 350,000,000 ADA—which had already been agreed upon for the same period—without sufficient explanation would also weaken the predictability and discipline that serve as constitutional fiscal guardrails for Treasury Withdrawals. For the reasons stated above, we cannot determine that this proposal satisfies the requirement for sufficient rational grounds set forth in Article 2, Section 6, Item 2 of the Constitution, and we therefore deem it unconstitutional at this time.
For the reasons stated above, we determine that it is unconstitutional.
- KtorZ64f97568…3a49AbstainActive · term ends epoch 653Rationale
Out of scope.
This is an info action contemplating no other governance action; it is therefore out of the scope of constitutionality and I am therefore abstaining.
However, from a constitutionality standpoint, I would highly question the compliance with "TENET 8 The Cardano Blockchain shall not unreasonably spend resources.". While other NCL where (at least) usually backed by the argument that the NCL approximately matched the treasury inflow; this proposal is empty of any justification.