Stablecoin DeFi Liquidity Budget
220 DReps voted · 88 with a rationale · 10 changed their vote
Open a row to read the rationale.
- Yes383K ₳No rationale
- Yes381.1K ₳No rationale
- Yes365.7K ₳No rationale
- Yes353.1K ₳No rationale
- Yes323.2K ₳No rationale
- No320.4K ₳Rationale
Panda thinks the proposal main goal is very valid, however Panda is not sure about
- Team members: I can see some, but why the rest? What would be their role?
- I have seen some chatter on X where you are OK in reducing slippage for stablecoin swaps but not pools fees (since you are looking for a 4% return to the treasury). Would be best aiming for an x% return for the Treasury while ignoring/denying potentially more swaps from users (more use-cases)? <- that is, returns above all
As a side note: you are looking for a 4% return, however have you considered about what 50million injections would do to the currently available yields?
- YesRevoted316.8K ₳History
Earlier votes
Yes9mo agoSuperseded
Yes9mo agoSuperseded
- Yes314.4K ₳Rationale
I've decided to vote yes on the Stablecoin DeFi Liquidity Budget Proposal.
A PDF version of this rationale is also made available.
This proposal doesn't come without concerns, but nonetheless I've decided to upvote it based on the below rationale:
Cardano undeniably faces big challenges in the DeFi ecosystem. Our TVL is very low compared to major competitors such as Ethereum and Solana. Especially stablecoins lack liquidity depth. This proposal directly addresses this issue.
This proposal has strategic alignment with institutions inside Cardano. More specifically, the Cardano Foundation's 2025 roadmap explicitly commits to providing an eight-figure ada amount in liquidity to key Cardano stablecoin projects.
Black Swan incidents like the one which happened on 10th of October 2025, provided us with concrete evidence of the liquidity constraints of our ecosystem (Liqwid Finance protocol).
I interpret this proposal more like an investment than an expense. As I have already stated I have a more conservative approach to treasury spending and we have already reached my personal threshold for this year, but since this amount will not be spent but invested with an expected return and the possibility to have it returned back, I am ok.
Shallow liquidity in our ecosystem causes us serious problems with user and institutional adoption: high slippage 4%-6% which makes us totally uncompetitive (worse than banks in the legacy world!) and more difficult for user on/off ramps, limited institutional participation due to liquidity constraints, etc.
Alignment with Cardano Vision & Strategy: Based on Cardano's long-term strategy and leadership statements: Cardano aims to become the financial operating system of the world. How can we express those claims without liquidity in DeFi & stablecoins?
Concerns & Reservations
This proposal carries with it some concerns which I have tried to evaluate and address:
Centralization risk of a small committee: This can be addressed by introducing more community members to the committee
No committee member has demonstrated treasury management of that scale: This is not active portfolio management but a conversion under specific terms & conditions that are predetermined. Also community oversight and help, including the tDAO will help mitigate those risks.
Price impact: Based on the proposed methodology (including OTC, gradual liquidation, volume distribution, etc), I really don't think the impact will be noticeable.
Picking winners / losers: This is my biggest concern so far. Hopefully tDAO will have strong oversight over committee selection. Also I strongly encourage gradual rotation of funds to other stablecoins: The initial incoming liquidity would have a positive effect on Cardano's DeFi, attracting more capital inflows and allowing the fund to rotate some of the allocated funds to other stablecoins over time. If we fail to attract new inflows though, there's a real threat to the remaining stablecoins if no rotation takes place. I expect CF's pledge to also help in this area (with their commitment to provide liquidity).
- Yes300.6K ₳No rationale
- Yes298.9K ₳Rationale
Stablecoin liquidity may be the number one thing holding Cardano back right now. The solution proposed in this budget strikes a good balance between decentralized control and autonomous, rapid execution. With this in mind, I am voting in support of this budget.
- Yes294.4K ₳No rationale
- No270.1K ₳Rationale
Based on a comprehensive evaluation of the proposal, established governance procedures, and aggregate community sentiment, I have submitted a NO vote for the "Stablecoin DeFi Liquidity Budget" proposal (50M ADA) in its current form.
Key Rationale
Lack of Prerequisite Structures and Planning
Absence of tDAO and Legal Foundation: The proposal relies on a tDAO for oversight, yet this body is not conceptualized, staffed, or operational. There is no existing legal entity or governance framework to safely manage or administer such a large fund, which is a fundamental red flag by any business, investment, or risk management standard.
Undefined Oversight and Reporting: Promises of developing accountability, reporting, and legal standards after budget approval are contrary to every recognized principle of prudent fund allocation. Best practices universally require such systems to be fully in place before any capital committal, not after.
Failure in Proposal Structuring
Premature and Over-broad Proposal: Rather than presenting a clearly actionable business plan, this initiative is more akin to a vague planning exercise masquerading as a fund request. It offers neither a tested operational framework nor a breakdown of risk models or performance expectations, and is structured as a "figure it out as we go" experiment using community assets.
Lack of Segmenting and Sequencing: The absence of a phased or modular approach—where design, governance, and legal structures are built and audited before funding is sought—represents a critical governance failure. Sound practice dictates that only after core frameworks and administrative competence are proven should capital deployment even be considered.
Business, Risk, and Investment Management Failures
No Professional Investment Policy or Guardrails: There are no portfolio allocation models, drawdown policies, counterparty limits, crisis response plans, or milestones tied to performance-based tranches—minimum standards for any professional asset manager or public treasury.
Irresponsible Risk Posture: The proposal concentrates risk on an unelected, only partially accountable committee, with unclear recusal rules or conflict of interest enforcement—violating both fiduciary duty principles and modern governance guardrails.
Lack of Strategic Depth and Focus
Liquidity Myopia: While liquidity is conclusively a core DeFi success factor, it is meaningless absent underlying real utility, enterprise traction, and a sustainable business model. Over-prioritization distorts resource allocation, increases exposure to mercenary capital, and can fail to deliver stickiness or real user adoption.
Redundancy and Inefficiency Risk: The broad, loosely-defined goals overlap with several other ecosystem initiatives, risking inefficient capital allocation, duplicated efforts, and wasted opportunity costs.
Diversification and Treasury Stewardship Principles
Concentration Risk: The wisdom of spreading risk—"never put all your eggs in one basket"—is wholly disregarded in the current plan. The lack of diversification, both functionally and by scope, endangers the treasury and is inconsistent with both modern portfolio management and responsible treasury practice.
Permanent Bureaucratic Overhead: Guaranteeing perpetual committee remuneration and legal overhead without clearly defined public-goods milestones or exit criteria is not only a governance anti-pattern but an economic liability to the community.
Best Practice and Comparative Analysis
Standard Practice: Leading public funds and private investment managers—whether in DeFi or traditional finance—always build legal, operational, and audit structures first. Investment committees are elected or appointed by competitive, transparent, and public call. Only after key-person risk, accountability, and business processes are in place does real capital begin deploying.
DAO Treasury Precedents: Successful ecosystem DAOs (e.g., Uniswap, Aave) introduce liquidity mining, grants, and reserve management slowly, with checks, tranching, and extensive upfront community debate. Large untried fund deployments without shadow governance, defined metrics, or staged releases have repeatedly (see various DeFi hacks, governance blowups) led to lasting loss of funds and community trust.
NO Vote Rationale
This proposal cannot be responsibly approved or recommended in its current form. It requests Cardano treasury assets while lacking even the minimum baseline of operational, legal, and strategic readiness demanded of any large grant, investment, or public-capital initiative. The only responsible recommendation is a NO vote, with the advisory that future proposals be modularized such that design, setup, governance, and legal structure occur sequentially, with capital made available only to proven, elected, and auditable administrative entities working from a foundation of clear, community-endorsed standards and diversified, milestone-based budget tranches.
- Yes261.6K ₳No rationale
- Yes260.2K ₳Rationale
Clear governance, transparency, and public good focus — boosting stablecoin liquidity benefits the entire ecosystem while returning revenue to the treasury.
- Yes252.9K ₳No rationale
- No245.5K ₳No rationale
- No238.8K ₳Rationale
I vote No on the "Stablecoin DeFi Liquidity Budget" proposal (50M ADA). I fully support the urgent need to boost Cardano’s DeFi ecosystem, where stablecoin liquidity lags competitors like Ethereum and Solana. Deeper liquidity would reduce slippage, strengthen on/off-ramps, and attract developers/market makers, aligning with the Cardano Foundation’s 2025 roadmap. However, critical flaws in execution, scale, and governance compel my rejection of this proposal in its current form.
My concerns are:- Conflict of Interest (COI) Risks: The interim committee includes members with ties to specific protocols (e.g., Minswap, Snek). Without mandatory COI disclosures or recusal rules, protocol selection (max 2 per category) risks favoritism, potentially marginalizing smaller DEXs like CSWAP.
- Excessive Withdrawal Size: At 50M ADA (~14% of treasury), the scale is disproportionate for a pilot, especially given the ~350M ADA Net Commitment Limit. A smaller 25M ADA fund would better test viability while preserving treasury flexibility.
- Unclear Execution Plan: The proposal lacks a clear plan to manage risks (e.g., stablecoin depegs or protocol hacks) and doesn’t explain how protocols will be fairly chosen. Reporting is vague, and the 2-protocol limit could unfairly favor certain projects without proper testing.
I advocate for a revised proposal at ~25M ADA, incorporating mandatory COI disclosures, a clear risk management plan, and transparent protocol selection criteria. This would balance bold action with accountability. I encourage dReps to propose info actions refining these elements for a stronger v2, ensuring Cardano’s DeFi growth without undue risk.
- Yes233.2K ₳No rationale
- Yes202.3K ₳Rationale
Cardano needs this
- Yes199K ₳Rationale
I agree with the principals of this but more would be needed and I think this should be just a secondary measure to improve defi. The first and most important step should be to BRING USDC to Cardano!!!!!
- Yes191.1K ₳No rationale
- Yes178.9K ₳No rationale
- Yes174.5K ₳No rationale
- Yes166.4K ₳No rationale
- Yes150.7K ₳No rationale
- Yes147.5K ₳No rationale
- Yes138.4K ₳Rationale
As an advocate for ecosystem education and responsible governance,** I voted YES** on this governance action.
The proposal offers a structured and transparent approach to deepening liquidity within the Cardano DeFi ecosystem by strategically supporting stablecoin markets. Strong liquidity is essential for adoption, price stability and the development of sustainable on-chain finance. The inclusion of a Treasury DAO (tDAO) with dRep oversight powers ensures community accountability and decentralization in managing the 50M ADA fund.
This initiative also contributes long-term value through the creation of open-source governance contracts and a legal framework that can guide future community-led treasury actions. With proper transparency and ongoing reporting, this proposal strengthens Cardano’s economic base while maintaining democratic oversight, aligning with my commitment to responsible ecosystem growth.
- Yes137.4K ₳No rationale
- Yes136.5K ₳No rationale
- Yes135.1K ₳Rationale
Stable coin liquidity is very important for defi. It is evident that the amount of stable coin liquidity on Cardano is holding back the potential of Cardano defi. With many defi projects in the works and the goal and vision to be a prominent or competing defi layer for the greater crypto industry, a surplus of stable coin liquidity is a must. Although I agree and will be voting YES on this live voting proposal, more than this initial 50 million ADA may be necessary for the defi eco system. This is a great and needed start for an initial injection, but we as an ecosystem should continue to monitor and evaluate the state of defi on Cardano and ask ourselves if another injection of X amount of ADA would be helpful or necessary.
- Yes131.9K ₳No rationale
- Yes126.2K ₳No rationale
- Yes123.1K ₳Rationale
Liquidity is the most important for any blockchain ecosystem. Cardano is suffering from this. While other stablecoin issuers were sidelined with heavily invested ecosystems, this proposal became one of the keys to improving DeFi usage by reducing slippage and provide a better trading experience.
- Yes115.6K ₳No rationale
- Yes110.9K ₳No rationale
- Yes109.5K ₳No rationale
- Yes108.3K ₳Rationale
I am voting to approve this proposal. The reasons for my vote are that this is not a spending request but an investment request that also has a benefit to the ecosystem through stablecoin liquidity. As such nothing is being lost since the funds remain in the ecosystem and can be returned to the treasury through a smart contract if the DReps choose to do so. The details of how the administration of this project will work will be important, but that is outside the scope of this info action. As an info action I approve of this request and look forward to seeing the treasury withdrawal request details.
- Yes89.9K ₳No rationale
- Yes58.6K ₳No rationale
- No55.9K ₳Rationale
better than the first, but still: what constitutes a stable coin?
Whats the selection mechanism for which pairs get liquidity and which companies get the contracts?
no
- Yes52.4K ₳Rationale
Summary
I support this proposal because Cardano urgently needs deeper liquidity and stronger stablecoin infrastructure to compete in the DeFi landscape. Deploying treasury ADA to bootstrap liquidity on decentralized exchanges and lending protocols has the potential to strengthen the entire ecosystem by:
- Reducing slippage and improving market efficiency.
- Supporting stablecoin adoption and stability.
- Attracting developers, traders, and institutional participants who require liquidity to build and operate.
This initiative aligns with Cardano’s long-term goals of fostering sustainable decentralized finance activity and creating real utility for ADA.
Concerns and Caveats
While I endorse the concept, I remain concerned about the current governance and execution model:
- Committee Structure & Legitimacy: The multisig committee is composed of well-known ecosystem actors, but they were not selected by dReps or via any decentralized community mandate. This creates a legitimacy gap around decision-making power over a very large treasury allocation.
- Conflict of Interest Risks: Several committee members have ties to particular DeFi projects. Even if acting in good faith, there is a risk of unconscious bias toward deploying funds to affiliated platforms rather than objectively stronger alternatives, which could harm competition and reduce effectiveness.
- Risk Management & Professional Oversight: The absence of a professional fund manager or entity with proven expertise in liquidity deployment and risk controls is concerning, especially when 50 million ADA is at stake. Mismanagement could lead to significant treasury losses.
Mid-Term Expectations
I am casting a YES vote to enable the immediate opportunity this proposal offers, but my support assumes that this venture will evolve over the mid-term toward:
- Stronger accountability mechanisms, including transparent reporting and meaningful oversight from dReps.
- Clear conflict-of-interest policies and recusal rules for committee members.
- Incorporation of professional fund management expertise, either directly or via advisors, to strengthen risk management.
These improvements do not need to be in place at launch, but the trajectory of this venture should clearly move in that direction if it is to maintain broad community trust.
Conclusion
Cardano’s DeFi ecosystem needs liquidity and stablecoin depth now, and this proposal represents a bold step forward. I am voting YES to seize the opportunity, while holding the expectation that governance, accountability, and professional risk management will be strengthened in the mid-term to ensure the treasury’s resources are deployed responsibly and without favoritism.
- No49.6K ₳Rationale
While I do find value in the overall stable coin liquidity budget the only issue that arises at first glance is the initial interim committee, I as a voter and community member would find more value in having the opportunity to choose the interim committee based off of not only inclusion in the ecosystem and community but also based off of the credentials provided notwithstanding the listed nine names of the submitted interim committee. I find value in being able to vote from a list of suitable applicants as opposed to a proposed list of contributors that may have personal interests to consider. I must reluctantly vote NO, not to stand against the proposal, but just due to a lack of the choice in the interim committee list.
LourdeOuroborus Imperator Aeternalis - Yes48.6K ₳Rationale
I helps Cardano to grow
- No45.2K ₳No rationale
- Yes40.4K ₳No rationale
- Yes37.9K ₳No rationale
- No33.8K ₳Rationale
50M is too much funding for this proposal.
- Yes29.3K ₳Rationale
Cardano needs more stable coin options.
- Yes26.7K ₳Rationale
This proposal has a trusted group of creators behind it and it is reasonable. Really, I would ask for 100M ADA at the very least for a stable coin.
- Yes25.7K ₳No rationale