Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA
6 of 7 committee members voted
- Cardano Foundation6796d87d…c280YesExpired · term ends epoch 580Rationale unavailable
- Cardano Atlantic Council07e0eb70…5bdeNoResigned · term ends epoch 580Rationale
This action is deemed Unconstitutional by the Cardano Atlantic Council due to the use of language proposing to modify the ratification thresholds dictated by the Cardano Constitution.
The published rationale for this governance action states (emphasis ours):
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.
the threshold for ratification of a Net Change Limit (NCL) governance action is defined in Appendix I, Section 3, TREASURY-O1a as follows:
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
The use of the language "shall be considered ratified" indicates an intent by the author(s) of this action to subvert the limit specified by the Constitutional Guardrails and thus makes this action Unconstitutional.
- Emurgodc2b0706…89b8NoExpired · term ends epoch 580Rationale
Emurgo concludes that this governance action is unconstitutional, based on the rationale provided below.
This Info action proposes to set the Net Change Limit (NCL) for 2025 at 300 million ADA and for 2026 at 250 million ADA.
Proposal link:
https://adastat.net/governances/7f320409d9998712ff3a3cdf0c9439e1543f236a3d746766f78f1fdbe1e06bf800The proposal sets the threshold to pass this NCL at 67%. However, according to the Cardano Constitution, the required threshold for a Net Change Limit is clearly defined as greater than 50% of the active voting stake.
Reference: Cardano Constitution
Section 3: Guardrails and Guidelines on Treasury Withdrawal Actions
Treasury withdrawal actions specify the destination and amount of a number of withdrawals from the Cardano treasury.
GUARDRAILS
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.
Based on this constitutional requirement, the appropriate threshold to pass a Net Change Limit should be 50% + 1 lovelace, not 67%.
The governance proposal is unconstitutional
- Input | Output3c9ebce6…1e4cNoExpired · term ends epoch 580Rationale
This Info Action does not include a hash of all of its off-chain content, making it possible for the information at its supporting urls to be changed without verifiable record. This violates ‘Article III, Section 5’ of the Cardano Constitution. As a result, this proposal does not satisfy the threshold submission requirements to constitute an Info Action and, therefore, there technically is nothing yet for the CC to review.
Although Info Actions (except for budget and treasury withdrawal Info Actions) are neither constitutional nor unconstitutional, all Info Actions must nevertheless follow the constitutional requirements for submission. Because this one does not, it cannot go forward.
The Cardano constitution requires a net change limit to be in place prior to the approval of a Cardano Blockchain ecosystem budget (Article IV, Section 3; TREASURY-01a).
While no restrictions are placed on the character or content of the net change limit, governance actions are “expected to follow a standardized and legible format including a URL and hash of all documented off-chain content to the Cardano Blockchain” (Article III, Section 5).
The Info Action under consideration does not include a hash of all of its documented off-chain content. Specifically, the rationale fails to hash the contents of two of its references, and is therefore procedurally unconstitutional. For clarity on how to ensure a high quality proposal with relation to all standards, we encourage potential proposers to check relevant documentation. We’ve included a guide on the formatting of governance actions in the references section of this rationale.
We want to reiterate that the net change limit is a critical dependency of later budget and treasury actions which the ICC is required to vote on. Because of this, IO must assess it as a matter of constitutional adjudication and, because of the violation of Article III, Section 5, find it procedurally unconstitutional.
That said, we applaud the initiative and forward-thinking displayed in the proposal and are eager to see DReps agree on a net change limit for the Cardano treasury.
- Intersect Constitutional Council85c47dd4…bf64NoExpired · term ends epoch 580Rationale
The Intersect Constitutional Council votes that the net change limit info action (7f320409d99987...6bf8#0) is unconstitutional after 6 of 7 members voted.
The governance action proposes net change limits for both 2025 and 2026 at 300 million ada and 250 million ada respectively. This is the first info action to propose a net change limit, an off-chain parameter to establish the maximum amount of treasury withdrawals allowed for any given period, in this case, the years 2025 and 2026. A net change limit is required by TREASURY-01(a) and TREASURY-02(a) Guardrails as outlined in Appendix I Section 3.
The proposal appears to be a community submitted proposal rather than an institutional one and the Council commends the initiative taken, as it is any ada holders right as outlined in Article III Section 3, “All holders of ada shall have the right to propose changes”.
The proposal for the most part meets the required standards as outlined in Article III Section 5. It follows a standardised and legible format including a URL and hash of documented off-chain content. The rationale also includes a title, abstract, reason for the proposal and relevant supporting materials.
During deliberations, the Council considered the importance of, and differences between, verifiability and immutability with regards to proposals and their supporting content. In this instance, the proposal metadata was stored in a mutable format on GitHub rather than a more immutable one such as IPFS. It was debated that having a URL and hash by which any potential changes could be identified and verified did provide some level of protection from proposal alterations post-submission. However, it was noted that the very fact that the metadata anchor file was changed within the first 48 hours of the governance action being submitted, causing confusion amongst voters regarding whether or not the hashes matched, even days after it had been corrected was enough for a number of Council members to deem this proposal unconstitutional.
The Constitution states that, “All owners of ada shall have the right to ensure that the process for participating in, submitting and voting on on-chain governance actions is open and transparent and is protected from undue influence and manipulation” and the Council members who voted unconstitutional in this instance deemed the initial confusion caused by early metadata inconsistencies enough to violate this principle.
The Council agreed that the wording of the proposal rationale itself was constitutional. However, the voter confusion caused by the initial change in proposal metadata hash and the need to respect voters time by not making them have to vote multiple times as a result of such incidents, the majority of Council members deemed this proposal unconstitutional.
This decision reinforces the expectation for clear, immutable documentation in governance submissions, while the Council acknowledges that multi-year treasury control proposals are permissible under the constitutional framework when appropriately documented.
- Eastern Cardano Council2ea7a78e…10ecAbstainExpired · term ends epoch 580Rationale
We have determined that this Info action does not meet the criteria deemed necessary for the Constitutional Committee to assess its constitutionality.
Article VII, Section 1 of the Cardano Constitution states "The Constitutional Committee shall comprise a set of owners of ada that is collectively responsible for ensuring that on-chain governance actions prior to enactment on-chain, are constitutional."
Additionally; Article VII, Section 4, Paragraph 2 states "Because "Info" actions have no on-chain effect and, accordingly, are neither constitutional nor unconstitutional, Constitutional Committee members may not prevent “Info” actions from being recorded on-chain. Members of the Constitutional Committee may nevertheless record a vote on-chain regarding an "Info" action in order to express their view on such "Info" action, including whether the suggested course of action proposed in such "Info" action, would be, in the view of such member, unconstitutional if it were to be enforced by on-chain mechanisms."
Finally; Article VII, Section 4, Paragraph 3 states "In the case of "Info" actions that propose a Cardano Blockchain ecosystem budget, Constitutional Committee members shall record a vote on-chain that sets forth their opinion as to whether the proposed budget, if it were to be implemented in the form contained in the "Info" action, would violate this Constitution."
The governance action with ID "7f320409d99987...6bf8#0" and title "Set 2025 Net Change Limit of 300M ADA, 2026 Net Change Limit of 250M ADA", as an Info governance action, does not relate to a budget proposal, nor does it gauge sentiment towards another type of governance action which could be enacted on-chain, so the Constitutional Committee is not empowered to assess its constitutionality, ensuring DReps and SPOs are the only ones able to influence its outcome.
We therefore Abstain.
We abstain from assessing the constitutionality of this governance action.
- Cardano Japan Council (ICC)4012cab5…0755Not votedExpired · term ends epoch 580No rationale