The second budget AMA session of the new year provided an update on the budget committee's progress and upcoming governance actions. The session began with an overview of key milestones, including the planned net change limit proposal, which aims to set a maximum withdrawal cap of 350 million ADA from the treasury for 2025. This limit is designed to maintain fiscal responsibility by aligning with the treasury replenishment rate and ensuring sustainable fund management over time. The proposal, scheduled for on-chain submission around January 20th, will establish an annual spending cap that remains in place unless superseded by a future governance action.
The discussion also introduced the five distinct budget proposals that will be submitted by Intersect, reflecting the preferences expressed by the DReps at the Constitutional Convention. These include Core Development, Research, Innovation, Governance, and Outreach, each addressing critical aspects of Cardano’s growth and sustainability. By structuring the budget into multiple separate votes, the process allows DReps greater flexibility in deciding which areas receive funding. Additionally, other organizations, such as Pragma, are preparing their own independent budget proposals for DRep approval.
A crucial aspect of the discussion revolved around governance and approval processes. If the Plutus and Hard Fork proceeds as expected, it will unlock the ability to execute treasury withdrawals under the new governance framework. In this scenario, DReps will need to approve both the info actions and corresponding treasury withdrawals to allocate funds effectively. If the new constitution is not yet enacted, the Interim Constitutional Committee (ICC) could still approve treasury withdrawals based on prior governance action approvals.
The committee also emphasized fiscal responsibility, noting that Intersect’s total treasury withdrawal request will not exceed 200 million ADA for 2025, spread across two equal withdrawals of 100 million ADA. This allocation includes funding for Project Catalyst, technical development, marketing, and community initiatives, while ensuring that a sufficient reserve remains for unexpected funding needs.
The session concluded with a discussion on supporting ecosystem builders and ensuring long-term sustainability for critical Cardano tooling and infrastructure. This led to the formation of a Tooling Working Group, which will evaluate existing projects, identify key infrastructure needs, and determine how to provide continued support to essential services within the ecosystem. The working group is expected to engage with community developers, service providers, and key stakeholders to develop a transparent process for funding and maintaining essential Cardano tools.
In addition, the conversation explored potential pathways for adoption efforts, particularly within municipal and corporate sectors. Recognizing that such initiatives do not currently fall under Intersect’s remit, attendees discussed the possibility of forming a dedicated adoption working group or regional hubs that could spearhead these efforts. The need for clear governance actions tailored to funding such initiatives was also highlighted, with ongoing discussions about developing specific governance action types for budget approvals beyond standard info actions.
The meeting wrapped up with a call for continued engagement, emphasizing that community input remains critical in shaping Cardano’s budget and governance processes. Upcoming priorities include finalizing the Tooling Working Group, refining budget proposals, and preparing for the net change limit governance action. The session reaffirmed Intersect’s commitment to ensuring transparency, fiscal responsibility, and sustainable funding mechanisms for the ecosystem, with an open invitation for community members to participate in the evolving governance framework.
