December 1st, 2025 Budget Comm Minutes
Budget Committee Weekly Meeting — December 1st, 2025
Date: December 1, 2025 Time: 07:47 EST (weekly Budget Committee call)
Attendance:
Committee Members (voting):
Kris Kowalski – Chair
Megan Hess – Vice Chair
Kriss Baird
Murasaki
Nico Cerny
Rita Mistry
Committee Support / Staff:
Lloyd Duhon – Budget Secretary
Simo Simovic – Project Manager, Budget Process
Executive Leadership / Guests:
Jack Briggs – Interim Executive Director, Intersect
Quorum: Confirmed (Megan, Murasaki, Kris K, Nico, Kriss B, and Rita present as voting members).
1. Opening and Context
Jack opened with a recap and context after an intense 2–3 week period, including:
The mainnet incident (~10 days prior).
Rapid drafting and publication of the Critical Integrations Budget Info Action.
The critical integrations proposal was a joint effort involving:
Founding entities
Intersect
Midnight
Governance input from Nico on constitutional alignment.
2. Critical Integrations Budget Info Action – Status Update
2.1 Process and Outcome
Following the mainnet incident, Jack and Murasaki coordinated quickly to frame a Critical Integrations Budget Info Action addressing ecosystem needs (e.g., tier-one infrastructure, integrations).
A call with Charles and intense drafting work led to:
The budget info action published on Thursday (prior week).
The proposal becoming the most popular budget info action to date in terms of DRep engagement and support.
Result:
The info action is passing the approval threshold.
There are a few “no” votes with substantive rationale; Jack and Murasaki are reviewing these carefully to address them in the upcoming Treasury Withdrawal governance action.
2.2 Next Steps – Withdrawal Action
A Treasury Withdrawal (TW) governance action will follow, in parallel with:
Responding to concerns raised in “no” votes.
Aligning timing and constitutional requirements.
3. Net Change Limit Extension Governance Action (Hosky & CC)
3.1 Overview
Over the weekend, a governance action proposed by Hosky and some CC members was published to:
Extend the current Net Change Limit (NCL) by 8 epochs.
Jack and the committee view this positively because it:
Provides extra time to handle NCL and Critical Integrations properly.
Reduces the risk of New Year holiday voting bottlenecks.
Avoids constitutional edge-cases around overlapping timelines.
3.2 Constitutional Timing Issue (Explanation by Nico)
Nico explained why the extension is constitutionally important:
Current situation without extension:
The Critical Integrations Budget Info Action expires at the end of epoch 603 (Dec 30).
Only after epoch 603 transitions to 604 can the system determine whether the info action is formally approved and ratified.
The current NCL expires at the end of epoch 604 (Jan 4, 2026).
If the Treasury Withdrawal for Critical Integrations only reaches required thresholds in epoch 604, its enactment would occur at the transition to epoch 605.
Problem:
At the moment of enactment (start of epoch 605), no valid NCL would exist, rendering the TW unconstitutional.
The 8-epoch extension solves this by ensuring:
There is overlap between:
the ratified Critical Integrations budget & TW timelines, and
a valid NCL.
3.3 Position of Budget Committee
Jack intends to secure Board permission for Intersect to publicly endorse the NCL extension and support its passage.
The extension:
Gives the Budget Committee more time to refine the 2026–27 NCL.
Removes pressure to push NCL votes through during the holiday season.
Next Board meeting: December 11, 2025
NCL and related topics will be on that agenda.
4. 2026–27 Net Change Limit – Reconsideration
4.1 Status of Existing Proposal
A 350M ADA, 18-month NCL proposal (2026–27) was already submitted to the Board following prior committee work.
Original rationale:
2025 inflows (January–December), plus
Unspent surplus from the 2025 NCL, rounded to a clean 350M ADA.
New reality:
The Critical Integrations budget (~70M ADA) will largely consume the previous NCL surplus.
Therefore, the simplification “inflows + leftover = 350M” is no longer accurate as written.
4.2 Board Feedback
Jack reported early Board feedback:
Board wants a clearer justification for the 350M ADA number.
There is a sense that additional capacity may be warranted (i.e., potentially more than 350M), to:
Enable more strategic investments, and
Avoid constraining major ecosystem opportunities.
No specific alternative number (e.g. 400M or 500M) has been requested yet, but Board is open to a higher NCL if properly justified.
4.3 Discussion: Draper & Other Large Budget Items
Draper multi-year budget (~70M ADA):
Not all drawn in year one; expected in staged withdrawals over several years.
Raises questions:
How much of multi-year commitments should be reflected in any single-year NCL?
Does it overly complicate the process to track multiple years of residual commitments?
Accounting complexity & ADA price volatility:
If 70M ADA is withdrawn upfront into a contract:
It becomes a large honeypot exposed to price swings and governance/longevity questions.
If instead:
DReps approve annual withdrawals (e.g., 20M ADA in 2026, more later),
There is room to adjust draws based on ADA price and updated needs.
Committee acknowledges:
Multi-year plans will add complexity, especially with changing ADA prices.
However, per-year TWs preserve flexibility and allow DReps to make contextual decisions each year.
5. Role of a Treasury Management Working Group
5.1 Concept
Lloyd reiterated a previous idea:
Establish a Treasury Management Working Group composed of:
Representatives from founding entities,
IO, CF, Midnight, major service providers,
Possibly CF business development (e.g., Pierre) and others close to the pipeline.
Purpose:
Gather forward-looking information on large-scale funding needs (e.g., Draper, stablecoin liquidity, infrastructure asks).
Size expected Treasury “load” over the next 1–3 years.
Provide inputs to help calibrate NCL levels beyond strictly inflow-based logic.
5.2 Tradeoffs
Pros:
Better visibility on critical strategic asks.
More nuanced calibration of NCL (e.g., inflows + specific top-up).
Cons:
Administrative overhead and coordination burden.
Risk that the committee still won’t have complete information.
Could delay time-sensitive decisions, especially given current time constraints.
6. NCL Strategy – Options and Philosophical Debate
6.1 Two Main Approaches
Conservative, inflow-based approach
NCL = previous-year inflows (optionally ±X%).
No deliberate deficit; the Treasury is preserved or slowly grows.
Special large opportunities require dedicated NCL raises (e.g., a one-off NCL increase tied to a specific proposal).
Investment-oriented, deficit-tolerant approach
NCL deliberately set above inflows (e.g., inflows + 20%, 30%, etc.).
Acknowledges that:
The Treasury is a finite but investable resource.
Some deficit spending is justified to grow the ecosystem and future inflows (sovereign wealth fund analogy).
6.2 Nico’s Perspective
Intersect’s core mandate may be:
Ensure Cardano governance always has a valid NCL.
Base NCL on sound, simple logic:
e.g., 2025 inflows ±15% as the Intersect baseline NCL.
If coalitions (e.g., pentad) want to spend more:
They can create a separate NCL governance action for a higher limit tied to a specific proposal.
Caution:
Spinning up a fully-fledged treasury-management function within the committee may be too heavy and still incomplete.
6.3 Lloyd’s Percentage-Of-Income Framework
Proposed medium/long-term pattern:
NCL is defined as: Available income for period = previous-year inflows NCL% = desired spend percentage (e.g., 90%, 100%, 120%)
Net Change Limit for the year = Income × NCL%
Scenarios:
100% → purely spend current inflows (Treasury balance stable).
<100% → Treasury grows (saving for future).
>100% → Treasury shrinks deliberately to fund aggressive growth.
Over time, community can choose a comfortable NCL% range, balancing prudence and investment.
6.4 Simo’s Question to Voting Members
Simo asked each voting member to reflect on:
Whether they support:
Inflows-only NCL,
Inflows + modest premium, or
More aggressive spending above inflows.
This feedback is needed to craft a credible rationale and wording for the final NCL governance action.
7. Emerging Consensus for This Cycle
7.1 Keep 350M ADA, Adjust Rationale
Given time constraints and the new context, the discussion converged around:
Keep the 350M ADA NCL figure (rather than scaling it down).
Update the rationale to reflect:
Actual 2025 usage (2025 effectively used up to 350M ADA once Critical Integrations is included).
That 350M is roughly 2025 inflows plus ~20%, representing a modest, deliberate premium to enable strategic investment.
Maintain the 18-month window structure, with further refinements to exact epochs and wording.
Arguments in favor:
Reducing NCL below 350M now would likely force another NCL raise mid-year, increasing governance overhead.
350M is still relatively conservative vs. the total Treasury balance.
It leaves room for:
Critical Integrations,
Test deployments of higher-impact initiatives, and
Additional proposals, without precluding later special NCL actions.
7.2 Timing & Process
Because the Critical Integrations budget undermined the old “inflows + leftover” narrative, the rationale text must be updated.
There is not yet a final vote on the updated rationale; the intention is:
Revise the document this week, and
Vote at the Wednesday meeting (if quorum is present).
Monday’s weekly call will act as a fallback if Wednesday does not achieve quorum.
8. Action Items
Update NCL rationale to reflect 2025 inflows + ~20% and full expected usage (including Critical Integrations)
Lloyd & Simo
By Wednesday, Dec 3, 2025
Keep NCL at 350M ADA; clarify logic and narrative.
Prepare updated NCL draft for committee review and vote
Lloyd & Simo
Next Wednesday meeting
Vote if quorum is present; Monday is backup.
Ensure newly elected committee members are added to invites and permissions
Lloyd & Simo
Immediately after meeting
Needed for quorum and inclusion in upcoming NCL decisions.
Coordinate with Board on support for the NCL extension GA
Jack
Before Dec 11 Board meeting
Seek Board permission to publicly endorse the extension.
(Optional longer-term) Initiate Treasury Management Working Group
Lloyd (with input from Nico, Simo)
To be scheduled
Identify founding entity reps, IO, CF BD (e.g., Pierre), etc., to improve medium-term planning.
9. Decisions Recorded
No formal vote was taken on the updated NCL rationale during this meeting.
Emerging direction:
Maintain 350M ADA as the proposed NCL amount.
Treat it as 2025 inflows + ~20% premium.
Update rationale text accordingly and seek formal approval at the next meeting.
10. Adjournment
Meeting ended at the top of the hour.
Lloyd reminded Dimitri (who joined late) that the key topic for Wednesday will be the NCL update and rationale refinement.
Next major touchpoint: Wednesday weekly Budget Committee call, followed by the Board meeting on December 11, 2025.
Last updated