Net Change Limit (Epoch 613 to Epoch 713)
On-chain changes
Informational action. No on-chain effect; the vote signals opinion only.
Abstract
The Cardano Constitution requires the establishment of a Net Change Limit (NCL), which defines the maximum amount of lovelace that can be withdrawn from the treasury during an outlined period of time. This governance action serves as an opportunity for all governance stakeholders to formally express their positions regarding the proposed Net Change Limit, ensuring transparency, accountability, and alignment across the ecosystem.
The Net Change Limit will begin at the start of Epoch 613 (13 February 2026) and conclude at the end of Epoch 713 (3 July 2027). The Net Change Limit will be 350,000,000,000,000 lovelace (350M ada). Unless superseded by a new NCL, this is the maximum amount that can be withdrawn from the treasury during this specific period and shall not be exceeded.
The Net Change Limit will be used when reviewing treasury withdrawal actions to ensure constitutionality as required by Article IV of the Cardano Constitution and the Treasury Withdrawal Guardrails outlined in Appendix I.
This action has been submitted on the behalf of the Cardano Budget Committee at Intersect, following community feedback.
Motivation & rationale
Prior to the submission of any treasury withdrawal, a Net Change Limit must be formally agreed upon by delegated representatives (Article IV Section 3 of the Constitution). Failure to establish a Net Change Limit shall render any such treasury withdrawal action unconstitutional and, therefore, inapplicable.
The Net Change Limit will be effective for the period specified in this action.
Period and Amount
The Net Change Limit (NCL) shall begin at the start of Epoch 613 (13 February 2026) and conclude at the end of Epoch 713 (3 July 2027).
The Net Change Limit shall be set at 350,000,000,000,000 lovelace (350 million ada).
An approximately 16-month 20 day NCL period is proposed to realign the NCL cycle with the mid-year budget season rather than year-end holidays, aiming to improve governance participation and downstream ecosystem impact. This timing also ensures that, when setting the subsequent NCL, a fully completed prior year of treasury inflow data is available, enabling more accurate modeling and clearer justification.
Calculation and Methodology
Net Income for 2025 is defined as the sum of treasury inflows from Epoch 532 through Epoch 604. These inflows totaled 306,940,195 ada.
To recognize existing approved budgets, the withdrawal limit is set at 350 million ada, representing approximately 115% of the realized Net Income. This elevated cap was primarily driven by the inclusion of the 2025 Stablecoin DeFi Liquidity Budget (Gov Action ID: gov_action1u4jrcvlkppjzuv5j9z5ksacwtvv77h6glu0knpcjut8gvjjfu0cqqt3alsy).
Although DReps approved this 50 million ada allocation, the proposers have not requested the funds via a treasury withdrawal/s at time of this NCL submission. However, to respect the will of the DReps and their demonstrated willingness to fund this initiative in 2025, we deemed it responsible to incorporate this approved amount into our NCL projection. Consequently, the current financial projection reflects both the inclusion of this 2025 budget and an evaluation of the anticipated development load for 2026.
Application and Compliance
This limit shall be applied in assessing treasury withdrawal actions to ensure compliance with Article IV of the Cardano Constitution and the Treasury Withdrawal Guardrails specified in Appendix I.
Voting and Thresholds
A vote in favor of this proposal indicates agreement with the proposed Net Change Limit, allowing for the submission of treasury withdrawal governance actions. However, the maximum amount that can be withdrawn from the treasury during this specific period shall not exceed the total sum outlined herein.
Per the Cardano Constitution, the approval of a Net Change Limit requires a threshold of greater than 50% of the active voting DRep stake. Therefore, this Net Change Limit will be considered passed if, at the time the governance action expires, the DRep YES votes represent more than 50% of the active voting stake. While not obligated, Constitutional Committee members are encouraged to provide their opinion via a rationale on this Net Change Limit.
2026 to 2027 Net Change Limit
Epochs 613 to 713Rationale highlights
Why some of the largest DReps voted for and against, in their own words.
Summary Yoroi DRep votes YES on the Net Change Limit (NCL) 2026 proposal, which sets a maximum treasury withdrawal limit of 350,000,000 ADA for the specified period. We support establishing a clear and well-defined limit to enable transparent and predictable...
Summary
Yoroi DRep votes YES on the Net Change Limit (NCL) 2026 proposal, which sets a maximum treasury withdrawal limit of 350,000,000 ADA for the specified period. We support establishing a clear and well-defined limit to enable transparent and predictable governance for ADA holders.
Rationale
Purpose and Scope of the Net Change Limit
This proposal establishes the maximum amount that may be withdrawn from the treasury during the specified period. Approval of the NCL does not authorize spending, but instead defines the boundary within which individual treasury withdrawal proposals may be evaluated and voted on.
Clarity of Intent and Context for the Proposed Amount
The proposed limit takes into account a previously approved Budget Info Action, namely Stablecoin DeFi Liquidity Budget. Acknowledging these prior approvals helps clarify that the proposed NCL is intended to accommodate known commitments, rather than signal automatic or unrestricted spending.
Timeline and Community Predictability
Aligning the NCL period with the mid-year budget cycle improves predictability around when treasury-related decisions are likely to occur. This makes it easier for the Cardano community to follow governance developments and engage with the process in a timely manner.
Conclusion
Yoroi supports this Info Action as a clear and reasonable guardrail that allows treasury governance to proceed in a predictable and accountable manner. We thank the Budget Committee for preparing this proposal and supporting the continuity of treasury governance.
I am voting YES for "Net Change Limit (Epoch 613 to Epoch 713)". I don't understand the logic behind the 350M ada limit stated in the metadata for this governance action, but since the expenditure limit is set to be less than the inflow over an 18-month...
I am voting YES for "Net Change Limit (Epoch 613 to Epoch 713)".
I don't understand the logic behind the 350M ada limit stated in the metadata for this governance action, but since the expenditure limit is set to be less than the inflow over an 18-month (17-month) period, I don't think it will destroy financial discipline.
私は「Net Change Limit (Epoch 613 to Epoch 713)」にYESを投票します。
このガバナンスアクションのメタデータに記載される350M ADAとなるロジックは理解できませんでしたが、18ヶ月（17ヶ月）の期間の流入額以下の支出額が設定されているため、財務規律を破壊するものではないと思います。
I am voting NO. 350M ADA is excessive. We must enforce strict fiscal discipline based on minimal treasury inflows. I advocate for a reduced limit of 200-250M ADA to force prioritization. After our initial heavy spending to plug gaps, we must now grow the...
I am voting NO. 350M ADA is excessive. We must enforce strict fiscal discipline based on minimal treasury inflows. I advocate for a reduced limit of 200-250M ADA to force prioritization. After our initial heavy spending to plug gaps, we must now grow the treasury, not deplete it.
A PDF version of this rationale is also made available.
I am voting NO. A 350M ADA limit is excessive. We must enforce strict fiscal discipline based on conservative, minimal inflow projections.
I advocate for a reduced Net Change Limit in the region of 200-250M ADA. This would force prioritization and ensure we operate within our means. Especially after our recent initial spending to plug significant infrastructure gaps, we should be growing the treasury rather than depleting it.
I am voting No for Net Change Limit for E613 to 713. Cardano approved extremely big budget for 2025 and its outcome hasn't reviewed yet. To respect decentrisation of our ecosystem, I basically opposed to big spending from treasury for specific entities. 350M...
I am voting No for Net Change Limit for E613 to 713. Cardano approved extremely big budget for 2025 and its outcome hasn't reviewed yet. To respect decentrisation of our ecosystem, I basically opposed to big spending from treasury for specific entities. 350M ADA is bigger NCL to previous limit. I recommend community for lowering it to 200M ADA or less.