Net Change Limit (Epoch 613 to Epoch 713)
55 SPOs voted · 3 with a rationale
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After careful consideration I have chosen to vote NO on this NCL of 350M ADA for 100 epochs (505 days). While I appreciate that the lengthened timeline and the normalized reduction of about 27.72% from the previous NCL, I still think it is a bit too much for the Cardano ecosystem's current position. The reserve is dwindling and emissions have decreased since last year, the price of ADA currently at $0.33 gives us very little leverage against actual costs measured in USD, and the 2030 Vision/Strategy is not quite refined enough that I feel comfortable spending 350M ADA without a more promising ROI. For these reasons I am voting NO on this proposal.
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I vote to ABSTAIN on the proposal for the “Net Change Limit (Epoch 613 to Epoch 713)” (gov_action1m3x...4jsr7q) as some of the proposal text now requires an amendment… following a constitutional amendment.
Under the rationale section titled “Application and Compliance”, the proposal states that “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.”. Following the recent enactment of the Cardano Blockchain Ecosystem Constitution v2.4, this is no longer correct as “Article IV” now covers the “Amendment Process” and not “The Cardano Blockchain Ecosystem Budget” as the previous Constitution did. This, once again, highlights the perils of introducing changes to such a central piece of the Cardano governance system without proper co-ordination or consultation of wider governance participants before submitting proposals live on mainnet.
Regarding the intention of the proposal, to set a new Net Change Limit (NCL) of 350 million ada for a period of approximately 16 months and 20 days, I have conflicting views currently. My voting history shows that I voted NO to proposals of a 300 million ada and a 350 million ada during the setting of the first NCL, while I did vote YES for the proposal for a 200 million ada NCL. My concerns then were justified, while the NCL was billed as a “spending cap, not a spending target”, it became just that. To the extent that we found ourselves in December 2025 frantically rushing governance, on a chain renowned for is methodical approach, just so that the founding entities could “hoover up” the remainder of the NCL before it expired. DReps approved a 70 million ada budget and withdrawal in record time, equating to 20% of the entire NCL for that period. Not only that, we even voted to extend the NCL in order to accommodate the resultant Treasury Withdrawal due to lack of foresight by the “Pentad” with the timing of their submissions.
Now, I am also a realist and I have to objectively assess my previous stance with present day reality. The first NCL was often quoted using an ada price of $0.50 and I judged it accordingly. If I use my basis of 200 million ada and account for a present-day price of $0.36 per ada, it would require 278 million ada to account for the decline in ada price. Secondly, accounting for this proposal being for 16 months and 20 days as opposed to one calendar year, that would equate to a total of 385 million ada. Therefore, a proposal of 350 million ada for this period does on paper translate to a reduction when stood up against the previous NCL.
With that said, I really do think that we should take a moment to reassess. We speed run governance in December 2025 with little pause for review following that frantic period. To just roll onto the next thing and exacerbate more spending when we’ve barely had chance to analyse the impact of the previous NCL cycle funding could be viewed as irresponsible. Yes, we have the Treasury Withdrawal votes to exercise that power but with the recent removal of the budget info action requirement from the Constitution, those lines too have just become a lot finer.
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