Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA
On-chain changes
Informational action. No on-chain effect; the vote signals opinion only.
Abstract
As part of the budget approval process, it is necessary to establish a Net Change Limit. This serves as an opportunity for all governance stakeholders to formally express their positions regarding the proposed Net Change Limit, ensuring transparency, accountability, and alignment with organizational objectives.
2025 Net Change Limit of 300,000,000,000,000 lovelace (300M ada) 2026 Net Change Limit of 250,000,000,000,000 lovelace (250M ada) The Net Change Limit beyond 2027 is not defined in this governance action.
The Net Change Limit will be used when reviewing both budget actions and treasury withdrawal actions to ensure constitutionality as required by Article IV of the Constitution and the Treasury Withdrawal Guardrails outlined in Appendix I.
Motivation & rationale
Prior to the submission of any budget request, a Net Change Limit must be formally agreed upon. Failure to establish a Net Change Limit shall render any such budget request unconstitutional and, therefore, inapplicable.
The Net Change Limit shall be effective for the period specified in this action. In the event that a mutually agreed Net Change Limit is not established for subsequent periods, the most recently approved Net Change Limit shall remain in force by default.
The Net Change Limit shall remain in effect until such time as a new Net Change Limit is formally approved in accordance with the applicable governance procedures.
Just to clarify, we are not IOG, CF, EMURGO, PRAGMA, INTERSECT or their staff, we are just community members. We won't give names right now because we don't want to get caught up in any drama.
We submitted this proposal because we believe that any further delay in deciding on the Net Change Limit could result in significant opportunity losses for the Cardano ecosystem.
To maintain the sustainability and stability of Cardano's treasury, a Net-Change-Limit has been suggested, which would, if approved, set the constitutional and democratic mandate for the amount of ada that can be withdrawn from the Treasury over the 2025 period. The intent is to ensure that expenditures remain sustainable while enabling strategic investment in ecosystem growth.
Inflows into the treasury are forecast to be 300M ADA in 2025 and 265M ADA in 2026.
Therefore, capping Treasury spending at that amount is a conservative approach. (For ease of remembering, we proposed 250M ADA for 2026.)
If you are a DRep or ICC member who believes that the amount should be higher than this, we encourage you to vote for this Net Change Limit and then vote for a higher Net Change Limit if one is proposed. It is entirely possible to approve and set a higher Net Change Limit later.
This approach aims to:
- Balance ecosystem growth with responsible treasury management,
- Ensure funds remain available for ongoing and future initiatives
- Provide clarity and predictability for all stakeholders
This limit shall be applied in assessing both budget actions and treasury withdrawal actions to ensure compliance with Article IV of the Constitution and the Treasury Withdrawal Guardrails specified in Appendix I of the Constitution.
In accordance with the Constitution, this action shall be considered ratified with a threshold of greater than 67% of the delegated ada to DReps voting in favor.
Note that the guardrail section of the Constitution states: TREASURY-01a (x) A net change limit for the Cardano treasury's balance per period of time must be agreed by the DReps via an on-chain governance action with a threshold of greater than 50% of the active voting stake.
However, the current DRep voting threshold for treasury withdrawals is set to 67%, so we align our proposed ratification threshold with this.
There is an opinion that the Net Change Limit should be treated as a percentage because the amount of inflow into the treasury changes every year. We think this is a great opinion in theory, but the downside of this opinion is the complexity of defining and agreeing on these. This governance action defines the Net Change Limit for 2025 and 2026 in accordance with the amount of inflow, addressing the concerns of those who say it should be defined as a percentage. Even if you are of the opinion that it should be defined as a percentage, we recommend that you carefully discuss and define an appropriate percentage and change the method after approving this governance action.
Rationale highlights
Why some of the largest DReps voted for and against, in their own words.
I am thinking of voting Yes for both Intersect-led NCL(350M-2025) and Community-led NCL(300M-2025,250M-2026). There are two reasons for this. Regarding the amount of NCL, I believe that Community-led NCL is better. Therefore, I will vote Yes for this. I will...
I am thinking of voting Yes for both Intersect-led NCL(350M-2025) and Community-led NCL(300M-2025,250M-2026).
There are two reasons for this.
- Regarding the amount of NCL, I believe that Community-led NCL is better. Therefore, I will vote Yes for this. I will provide more details later.
- On the other hand, the worst-case scenario is that NCL is not agreed upon and set. To avoid this, I will also vote Yes for Intersect-led NCL. Although I believe that Community-led NCL is better, Intersect-led NCL is also acceptable in my opinion. I will provide more details later.
Details of reasons and concerns
- Why I think Community-led NCL is better
I will consider the pros and cons of Intersect-led NCL and Community-led NCL. I believe that Community-led NCL proposes a substantially better figure, so I will support it.
1-a) Points where I think Community-led NCL is better than Intersect-led NCL.
・The inflow to the treasury in 2025 is clearly less than the inflow in 2024, so I think it would have been better to use the projected inflow for 2025. The logic behind using the actual results for 2024 did not seem very clear to me from the rationale in this governance action.
・It would have been better to set the NCL for 2026 at the same time. The current Intersect block budget appears to be scheduled so that all expenditures are made from the treasury in 2025, including items that may be fine to spend in 2026. Not defining the NCL for 2026 could be an incentive to unnecessarily bring forward spending plans in 2025.1-b) Points where I think the Intersect-led NCL is better than the Community-led NCL.
・The Intersect-led NCL is better organized in terms of format. This includes the definition of the NCL and its period.- Reasons for voting Yes on the Intersect-led NCL at the same time
In my opinion, the worst outcome is that the NCL is not agreed upon after all. With the trend of global deregulation of blockchain, if the NCL is not agreed upon, the creativity of the community is limited, and Cardano's progress slows down, it will be a big loss in terms of Cardano's vision and roadmap.
One concern about voting Yes to both is the troubling question of what will happen if both NCLs are approved.
2-a) If we consider that the 2025 NCL will be overwritten, we may end up with an NCL of 350M ADA applied in 2025 and an NCL of 250M ADA applied in 2026.
2-b) The 2025 Net Change Limit does not contain any wording to the effect that "if this is adopted after the adoption of 'Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA,' the NCLs equivalent to 2025 in 'Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA' will be revoked." Therefore, if we consider that the 2025 NCL will not be automatically overwritten and that both NCLs will coexist and the stricter NCL will be applied, the 300M ADA NCL may be applied in 2025 and the 250M ADA NCL may be applied in 2026.
This interpretation will likely be determined by the Constitutional Committee, but I believe that either interpretation is better than having no NCLs at all.
*I have no particular conflict of interest related to this governance action.
私は、Intersect主導NCLとコミュニティ主導NCLの両方にYes投票をしようと考えています。
理由は２つです。
NCLの金額については、私は、コミュニティ主導NCLの方がより良いと考えています。よってこれにYesを投票します。後ほど詳細を記載します。
一方で、NCLが合意されず設定されないというシナリオは最悪のシナリオです。これを回避するために、Intersect主導NCLにもYesを投票します。コミュニティ主導NCLの方がより良いと考えていますが、Intersect主導NCLも私の考えでは許容可能です。後ほど詳細を記載します。
理由の詳細と懸念事項
- コミュニティ主導NCLの方がより良いと考える理由
Intersect主導NCLとコミュニティ主導NCLのメリットデメリットを考えます。コミュニティ主導NCLの方が実質的に良い数値を提案していると考えているため、これに賛成します。
Intersect主導NCLよりコミュニティ主導NCLの方が優れていると思う点。
・2025年の流入額は明らかに2024年の流入額より少ないため、2025年の流入額見込みを使用する方が良かったと考えています。2024年の実績を使った方が良いロジックはあまり私にとってこのガバナンスアクションに記載されるRationaleからは明確ではないように思えました。
・2026年のNCLも同時に設定した方が良かったように思えます。現在のIntersectのブロックBudgetは、おそらく2026年に支出しても問題ない可能性がある項目も含めて、2025年に全てトレジャリーから支出されるように支出スケジュールが組まれているように見えます。2026年のNCLが定義されないことで2025年に不必要に支出計画を前倒しするインセンティブになると可能性があります。コミュニティ主導NCLよりIntersect主導NCLの方が優れていると思う点。
・形式面はよりIntersect主導NCLの方がより良く整理されています。NCLやその期間の定義などです。- 同時にIntersect主導NCLにもYesを投票する理由
私が思うに、最悪の結末はNCLが結局合意されないことです。ブロックチェーンの世界的な規制緩和の潮流が巻き起こる中で、NCLが合意されず、コミュニティの創造性が制限され、Cardanoの歩みが遅くなることはCardanoのビジョンやロードマップから見て大きな損失です。
両方にYesをする点の１つの懸念として、この２つのNCLが２つともに承認された場合に何が起こるのかは悩ましい問いです。
2025年のNCLが上書きされると考える場合、2025年に350M ADAのNCLが適用され、2026年に250M ADAのNCLが適用される状態になるかもしれません。
・2025 Net Change Limitにおいて、「「Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA」が採択されたのちにこれが採択されたら、「Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA」の2025年に相当するNCLを取り消す」という旨の文言がないため、2025年のNCLが自動的に上書きはされず、両方のNCLが併存し、より厳しい方のNCLが適用されると考える場合、・2025年に300M ADAのNCLが適用され、2026年に250M ADAのNCLが適用される状態になるかもしれません。
この解釈は、憲法委員会が判断を下すと考えられますが、いずれの解釈を取ったとしても、NCLが全く設定されない状態と比べるとより良いと私は考えています。*このガバナンスアクションに関連する利益相反は私には特にありません。
TL;DR: EDC voted NO. Setting the NCL for two years at once—even if we agree more with the 300M ADA limit—is not the right approach. As a community, we will refine the process in the coming months. There's no need to rush to set an NCL for 2026.
As a DRep, I have decided to vote YES on the governance action regarding the setting of the Net Change Limit (NCL). The Governance Action (GA) proposes an NCL of 300M ADA for 2025 and 250M ADA for 2026. It is crucial that the NCL does not exceed the expected...
As a DRep, I have decided to vote YES on the governance action regarding the setting of the Net Change Limit (NCL).
The Governance Action (GA) proposes an NCL of 300M ADA for 2025 and 250M ADA for 2026.
It is crucial that the NCL does not exceed the expected revenues of the Treasury. A prudent economist aims to ensure expenses remain below revenues while also building reserves for the future.
Personally, I would prefer an NCL of 280M ADA for 2025 and 230M ADA for 2026. That said, I recognize that during a bull market, we can afford to allocate more funds—potentially even using Treasury resources to buy stablecoins.
For Cardano to thrive, it must remain in the top 10 blockchain platforms in the coming years and stay competitive. Achieving this requires consistent investment, particularly in scalability.
From a long-term perspective, Cardano must also prepare for resistance against quantum computers. This will demand significant investment over the next decade, which needs to be factored into current planning.
The Intersect budget is estimated at 260M ADA—lower than the proposed NCL. I believe this budget can be reduced; however, even if it isn't, it will remain within the limits set by this GA. Therefore, the NCL will not hinder ecosystem funding.
I propose utilizing the Treasury to mint stablecoins within the Cardano ecosystem, which could generate yield and serve as an additional revenue stream. At present, ADA fee revenue does not meet expectations, and diversifying income sources is critical.
Yield generation could also be redistributed as staking rewards. If ADA could capture the success of the Cardano ecosystem, it could have a positive impact on the market capitalization.
These are the reasons I advocate for setting the NCL above the Intersect budget.
However, I do acknowledge the risks. If a new NCL is not approved for 2027, the last approved NCL—250M ADA—will remain in effect. This could result in spending exceeding Treasury income that year. Nevertheless, I am confident the community will successfully ratify a new NCL when the time comes.
In my opinion, the NCL should be calculated as a percentage of Treasury income from the previous year. For instance, if Treasury income totaled 300M ADA during the last 73 epochs and the NCL was set at 90%, the spending limit would be 270M ADA.
Important monetary parameters are currently defined as percentages, and it would be wise to maintain this convention. Additionally, such a mechanism could provide stability and predictability over multiple years without requiring frequent adjustments.
As the GA indicates, the method of setting the NCL can always be revised. I do not intend to promote my own perspective by rejecting other Governance Actions.
I appreciate that this GA originates from the community rather than from founding entities. It is encouraging to see the community assuming greater responsibility.
The proposed NCLs for the next two years are reasonable and align with long-term sustainability. It is crucial not to delay investments in ecosystem development. The sooner we approve the NCL, the better.
Disclaimer: If an alternative GA proposing a different NCL emerges and aligns more closely with my views, I may reconsider my vote. It makes sense to support only one proposal.
✅ 我投支持生态投资，也乐意看到来自社区的预算提案，这表示社区的成员们逐渐接过Cardano治理的接力棒。 不过： 📌 长期可持续性比短期激进投资更重要 Cardano 需要保持稳健的财政策略，保证未来的生态稳定性。虽然投资生态系统至关重要，但支出必须在可持续的框架内进行。300M ADA 是很高的数目， 比如catalyst生态基金就算每轮拨款慷慨的30M ADA，一年运营有大概3轮，那总共也才90M，剩下的210M ADA不管怎么考虑，都是极大的花销，我们应该花在哪里？ 📌 缺乏对国库资金使用效率的评估...
✅ 我投支持生态投资，也乐意看到来自社区的预算提案，这表示社区的成员们逐渐接过Cardano治理的接力棒。
不过：
📌 长期可持续性比短期激进投资更重要
Cardano 需要保持稳健的财政策略，保证未来的生态稳定性。虽然投资生态系统至关重要，但支出必须在可持续的框架内进行。300M ADA 是很高的数目， 比如catalyst生态基金就算每轮拨款慷慨的30M ADA，一年运营有大概3轮，那总共也才90M，剩下的210M ADA不管怎么考虑，都是极大的花销，我们应该花在哪里？📌 缺乏对国库资金使用效率的评估
目前Cardano 尚未建立完善的财政支出审查机制，例如 Catalyst 的资金使用效率仍有争议。在没有充足数据支撑的情况下，可能造成资金浪费/滥用。📌 支持更保守的 NCL，更符合风险管理原则
目前的市场环境充满不确定性，Cardano 也应该避免过度支出，以确保未来能够灵活应对市场变化。相比 300M ADA，我更倾向更低的预算范围，这可以在发展和财政稳健性之间取得更好的平衡。基于以上理由， 我投出反对票。