Yes Treasury Withdrawals Committed

IO: Cardano Upgrades

2026-05-23

Summary

RCADA votes YES on the IO: Cardano Upgrades Treasury Withdrawal proposal.

The proposal combines three strategically important workstreams — CIP-159 Account Address Enhancement, Multi-Asset Treasury design work (CPS-23), and Native Babel Fees — aimed at reducing onboarding friction, improving wallet and DeFi economics, and strengthening long-term Treasury resilience.

While RCADA retains reservations around proposal bundling, cost transparency, and delivery execution, we believe the expected ecosystem value and long-term strategic importance justify support at this stage.

RCADA also signals that future Treasury proposals should continue improving modularity, milestone transparency, and financial accountability.

Key Considerations

  • Strong ecosystem utility through meaningful usability and adoption improvements.
  • Removal of user friction through Native Babel Fees, allowing transaction fees to be paid in native assets.
  • Improved wallet monetisation, batching, and Layer 2 functionality via CIP-159.
  • Strategic value in exploring Multi-Asset Treasury capabilities without pre-committing to future implementation.
  • Positive governance improvements through milestone-based disbursement, refunds for unused funds, third-party assurance, and Intersect-administered smart contracts.
  • Continued concerns regarding proposal bundling and limited cost transparency.
  • Execution timelines and delivery maturity warrant ongoing monitoring.
  • Babel Fees MVP introduces short-term centralisation concerns which should evolve toward decentralised provision over time.

What this action does

This Treasury Withdrawal proposal requests ₳13,103,039 to fund three coordinated protocol and ecosystem upgrade initiatives delivered by IO in collaboration with Ensurable Systems.

The proposal funds:

  1. CIP-159 Account Address Enhancement
    Expands account address capabilities to enable micro-fee collection, more flexible wallet economics, Layer 2 reserve management, and improved application design patterns.

  2. Multi-Asset Treasury (CPS-23 design work)
    Begins research and specification work for enabling the Cardano Treasury to eventually support stablecoins and other native assets alongside ADA, improving budgeting resilience and reducing volatility exposure.

  3. Native Babel Fees
    Enables users to pay transaction fees using native Cardano assets rather than requiring ADA, reducing onboarding friction and improving accessibility for stablecoin and bridged asset users.

The proposal includes milestone-based funding, third-party assurance mechanisms, refund provisions for unused funds, and Intersect-administered smart contract oversight.

Analysis Findings

Constitutional / Guardrails Assessment

  • ✔ Aligns with Tenet 3 by improving developer capability and reducing barriers to building applications on Cardano.
  • ✔ Supports Tenet 6 through improved interoperability and reduced friction for cross-chain and multi-asset participation.
  • ✔ Supports Tenet 9 by improving accessibility and fairness for users entering the ecosystem.
  • ✔ Treasury governance mechanisms include refund provisions, public accountability, and milestone oversight.
  • ⚠ Multi-Asset Treasury design introduces future monetary and governance implications requiring careful constitutional scrutiny if implementation proceeds.
  • ⚠ Babel Fee provider centralisation risk exists during MVP phase and should be reduced over time.
  • ❌ No constitutional violations identified at this stage.

Assessment: Conditional Pass

Process & Governance Quality

Clarity & structure
Proposal is reasonably detailed and demonstrates stronger governance maturity than many prior Treasury requests.

Bundling / admin designation
RCADA retains reservations regarding bundling multiple workstreams into a single Treasury request, though technical and strategic overlap partially justifies the approach.

Auditability
Strong relative to prior proposals, with milestone-based disbursement, refund provisions, third-party assurance, and smart-contract administration.

Precedent risk
Moderate concern that bundled Treasury asks could become normalized if not carefully constrained.

Assessment: Mixed–Strong

Impact & Risk Analysis

Ecosystem benefit
High potential value through reduced onboarding friction, improved wallet economics, and enhanced protocol capabilities.

Execution risk
Moderate. Delivery complexity is significant and Cardano protocol timelines historically extend beyond initial expectations.

Financial / governance risk
Moderate. Treasury size is material and cost attribution could be clearer, though governance safeguards meaningfully reduce risk.

Assessment: Medium

Ratings (Decision Support Only)

Dimension Score (1–5)
Constitutional clarity 4
Governance quality 3
Execution credibility 4
Ecosystem value 5
Risk balance 4

RCADA Rationale

RCADA supports this proposal because it addresses several meaningful friction points that continue to limit Cardano’s usability, adoption, and long-term competitiveness. While we retain important reservations around governance quality, cost transparency, and proposal structure, we believe the expected ecosystem value and strategic importance of these upgrades justify support at this time.

This proposal combines three major workstreams: CIP-159 Account Address Enhancement, Multi-Asset Treasury design work (CPS-23), and Native Babel Fees. Collectively, these initiatives aim to improve wallet economics, reduce onboarding friction, enable more sustainable Treasury capabilities, and strengthen Cardano’s broader application and DeFi ecosystem. Importantly, these are not purely speculative concepts. They target genuine limitations experienced today by developers, wallets, users, and infrastructure providers.

The strongest case for support lies in the practical ecosystem improvements this proposal could unlock.

CIP-159 has the potential to materially improve Cardano’s usability and application design flexibility. By enabling more flexible account address functionality and micro-fee collection, it addresses longstanding limitations affecting wallet monetisation, batchers, aggregators, and Layer 2 reserve management. Lowering these friction points could improve both user experience and economic sustainability for ecosystem participants.

Similarly, Native Babel Fees addresses one of Cardano’s most persistent onboarding barriers: the requirement to first acquire ADA before transacting. Enabling users to pay fees using native assets has the potential to improve accessibility for stablecoin users, bridged asset holders, and first-time participants entering Cardano’s ecosystem. In an increasingly competitive multi-chain environment, reducing avoidable friction matters.

We also recognise the longer-term strategic importance of beginning design work around a Multi-Asset Treasury. While RCADA does not view future Treasury diversification as automatically desirable or inevitable, we acknowledge that stable-value budgeting, diversified treasury management, and reduced exposure to ADA volatility warrant serious exploration. Supporting research and specification work is not the same as pre-approving future implementation. Any eventual proposal to alter Treasury asset composition should still be subject to rigorous constitutional, governance, and risk scrutiny.

We also acknowledge that this proposal demonstrates stronger governance maturity than many earlier Treasury requests. Milestone-based disbursement, refund provisions for unused funds, third-party assurance, Intersect-administered smart contracts, and public auditability mechanisms all represent positive steps toward more accountable Treasury governance.

However, our YES vote should not be interpreted as unconditional endorsement.

RCADA continues to hold concerns around proposal bundling. Although the three workstreams are more strategically connected than many prior omnibus-style Treasury proposals, we still believe modular funding requests generally improve governance quality by allowing DReps to assess initiatives on their own merits. In this case, we believe the shared strategic direction and technical interdependence justify flexibility, but this should not become the default standard for future Treasury asks.

We also believe cost transparency remains insufficiently detailed for a Treasury request of this size. While high-level budget categories are provided, clearer breakdowns of staffing assumptions, engineering effort, resource allocation, and milestone-level cost attribution would materially improve confidence and accountability. As Treasury governance matures, RCADA expects increasingly robust financial transparency from proposals requesting significant public funding.

Additionally, the proposal’s timelines and delivery assumptions deserve careful monitoring. Cardano has historically prioritised high-assurance engineering, which has often resulted in slower delivery cycles than anticipated. While RCADA recognises the complexity of protocol development and does not wish to penalise engineering rigor, we believe the ecosystem must increasingly demonstrate an ability to execute and deliver measurable outcomes within reasonable expectations.

We also encourage particular caution around the initial Babel Fee implementation model, which currently envisions a limited provider structure during its MVP phase. While we understand the pragmatic reasons for phased delivery, RCADA strongly believes any fee abstraction system should evolve toward a competitive, decentralised, and permissionless model as quickly as practical to avoid unnecessary centralisation risks.

Ultimately, RCADA believes governance should not become so rigid that it prevents meaningful progress. Cardano’s Treasury exists to fund ecosystem advancement, and the proposals that deserve support are those capable of delivering real utility while remaining accountable to the community. Despite our reservations, we believe this proposal meets that threshold.

For these reasons, RCADA votes YES, while encouraging stronger Treasury accountability, clearer cost transparency, and measurable delivery expectations as Cardano governance continues to mature.

RCADA’s full vote assessment can be found here: “https://brolloks.github.io/rcada-drep-votes/”.