Reforming Treasury Governance

Summary

RCADA votes ABSTAIN on Reforming Treasury Governance.

RCADA supports the need for Treasury governance reform and welcomes this proposal as a serious discussion starter. However, the outlined model still leaves important questions unanswered around strategic entities, expert commissions, authority boundaries, conflicts of interest, transparency, and accountability. RCADA supports deeper development of the ideas, but is not ready to endorse the model as written.

Key Considerations

This is an Info Action, not a Treasury Withdrawal or protocol parameter change.
The proposal does not directly request funds or implement a binding process.
The proposal argues that Cardano’s current Treasury process is fragmented, reactive, and lacks sufficient strategic direction.
RCADA agrees that the Net Change Limit is a ceiling, not a real budget.
RCADA sees value in exploring a clearer sequence from Net Change Limit, to thematic budget structure, to project evaluation.
The proposal introduces ideas for a strategic entity and expert commission, but does not yet define enough implementation detail.
Key open questions include eligibility, selection method, authority boundaries, compensation, conflicts of interest, recusal, transparency, appeals, removal, and sunset provisions.
RCADA believes expert review can support Treasury governance, but must not replace DRep and delegator oversight.
RCADA’s abstain is constructive: support for further exploration, not rejection of the problem statement.
RCADA intends to publish a companion deep-dive analysis to support wider discussion.

What this action does

This Info Action introduces ideas for reforming Cardano Treasury governance.

The proposal argues that the current Treasury process has created a funding impasse, unhealthy competition between different funding domains, and insufficient strategic direction. It suggests that the governance system should more explicitly support Treasury governance through clearer strategy, budget structure, and process design.

The proposal presents several basic propositions, including:

Treasury governance should provide clear direction, coherent strategy, and a specific roadmap.
Treasury governance should be explicitly addressed and supported by the governance system and Constitution.
The Net Change Limit should not be treated as the overall budget.
Cardano should develop a dedicated budget for investment.
The budget should use thematic categories so important domains can exist side by side.
DReps should vote on balanced budgets rather than directly comparing isolated individual projects.
A strategic entity should prepare, propose, and implement a budget.
An expert commission should evaluate and select projects that meet budgetary requirements.

The proposal also suggests a Treasury governance sequence:

Vote on the Net Change Limit.
Vote on the budget amount, structure, and domain allocations.
Vote on an overall Treasury Withdrawal containing selected projects and funding amounts under that budget structure.

The proposed budget categories include core protocol and infrastructure, developer tooling and technical resources, research and innovation, commercial ecosystem growth, administration and operational support, community, education and marketing, other strategic or public-good initiatives, and a functional reserve.

Analysis Findings

Constitutional / Guardrails Assessment

As an Info Action, this proposal does not directly change protocol parameters, withdraw Treasury funds, or amend the Constitution.

Positive factors:

✔ Appropriate action type for opening discussion on governance reform.
✔ No direct Treasury withdrawal.
✔ No direct protocol change.
✔ No direct constitutional amendment.
✔ Clearly states that implementation would require further refinement and possible process or constitutional changes.
✔ Encourages wider ecosystem collaboration.

Concerns:

⚠ The proposal may create a governance signal that could later be interpreted as endorsement of under-specified institutional structures.
⚠ The strategic entity and expert commission are not defined in sufficient detail for implementation.
⚠ Future implementation could affect Treasury governance, DRep authority, proposal access, and community oversight.
⚠ Any constitutional or process changes resulting from this discussion would require much stronger specification.

Assessment: Pass as discussion; not ready for implementation endorsement

Process & Governance Quality

RCADA views the proposal as a constructive and timely discussion starter. Treasury governance is one of the hardest problems Cardano now has to solve. The current process has exposed real weaknesses, including fragmented proposal-by-proposal voting, DRep workload, limited shared budget strategy, difficult comparisons between unrelated funding domains, and community tension around scarce Treasury resources.

The proposal’s strongest contribution is the idea of separating the Net Change Limit from the actual budget process. RCADA agrees that the NCL is a ceiling, not a budget. A collection of individual Treasury withdrawals does not, by itself, create a coherent strategy.

RCADA is especially interested in a sequence where the community first considers the overall Treasury ceiling, then a thematic budget structure, and only then project evaluation. In RCADA’s companion deep-dive analysis, this NCL → thematic budget → project selection sequence is identified as one of the most promising and actionable parts of the proposal.

However, the proposal remains a rough outline. That is not a criticism of AtlasHub; it is the nature of this Info Action. The proposal opens an important conversation, but does not yet answer enough of the design questions that would determine whether the model could be implemented safely, fairly, and without creating new centralisation risks.

Assessment: Constructive direction; implementation details underdeveloped

Impact & Risk Analysis

Potential benefits:

Better distinction between Treasury ceiling and actual budget.
Clearer strategic funding priorities.
Reduced proposal-by-proposal fragmentation.
Less unhealthy competition between unrelated domains.
Improved DRep workload management.
Better evaluation support for complex proposals.
Opportunity to develop a more mature Treasury governance model for Cardano.
Potential to make Cardano a model for other decentralized ecosystems.

Risks and concerns:

Strategic entities or expert commissions could become gatekeeping bodies.
Expert review could drift from advisory support into de facto decision-making.
Conflicts of interest could be difficult to manage if experts are affiliated with frequent Treasury proposers.
Smaller proposers could be disadvantaged by a more professionalized process.
Compensation and appointment rules could create legitimacy concerns.
Authority boundaries between preparing, recommending, selecting, and implementing could become blurred.
A Yes vote on this Info Action could later be read as endorsement of structures that are not yet fully defined.

Assessment: Important reform area; promising ideas; significant design questions remain

Ratings (Decision Support Only)

Dimension	Score (1–5)
Problem diagnosis	4
Strategic relevance	5
Governance quality	3
Implementation clarity	2
Accountability safeguards	2
Decentralisation risk management	3
Overall score	🟡 68% — ABSTAIN; strong discussion starter, not implementation-ready

RCADA Rationale

RCADA votes ABSTAIN on Reforming Treasury Governance.

RCADA welcomes this Info Action as a serious and timely discussion starter. Treasury governance is one of the hardest problems Cardano now has to solve. The current process has exposed real weaknesses: fragmented proposal-by-proposal voting, DRep workload, limited shared budget strategy, difficult comparisons between unrelated funding domains, and community tension around scarce Treasury resources.

RCADA agrees with the core diagnosis. The Net Change Limit is a ceiling, not a budget. A collection of individual Treasury withdrawals does not, by itself, create a coherent strategy. Cardano would benefit from a clearer process for setting funding priorities, defining budget categories, reducing unnecessary competition between unrelated domains, and giving DReps better tools for evaluating proposals.

RCADA is especially interested in the proposed sequence of moving from the Net Change Limit, to a thematic budget structure, and only then to project evaluation. In RCADA’s companion deep-dive analysis, we identify this NCL → thematic budget → project selection sequence as one of the most promising and actionable parts of the proposal. We believe this idea deserves further development regardless of whether the community ultimately supports a strategic entity or expert commission.

However, RCADA is abstaining because the proposal remains a rough outline. That is not meant as a criticism of AtlasHub. The proposal itself is framed as an Info Action to open public discussion, not as a complete implementation plan. RCADA appreciates that approach. At the same time, an Info Action can still create a durable governance signal, and we do not want a Yes vote to be read later as endorsement of structures whose details are not yet defined.

The most important open questions relate to the proposed strategic entity and expert commission. RCADA is open to exploring expert input, structured budget planning, and professional review processes. These could help DReps make better decisions and could help Cardano develop a Treasury model that other ecosystems may learn from. But the next phase of discussion needs to define the operating model much more clearly.

For RCADA, future work should answer questions such as:

What specific problem is each body solving?
Would an expert commission be advisory, decision-making, or implementation-focused?
Would DReps retain the final vote over actual Treasury withdrawals?
Who would be eligible to serve?
Would members be elected by DReps, elected by ada holders, appointed by institutions, selected by open application, or chosen through another process?
Should these bodies include Cardano community members, independent external experts, technical specialists, financial reviewers, governance experts, or a mix?
Would members be paid, contracted, reimbursed, or voluntary?
If paid, who sets compensation and how is it capped?
How would conflicts of interest be disclosed and managed?
Could members evaluate proposals from organisations they are affiliated with?
What recusal rules would apply?
What transparency would be required around scoring, meeting notes, dissenting opinions, and recommendation logic?
What appeal or challenge mechanism would proposers and DReps have?
How would smaller builders and community projects be protected from insider gatekeeping?
What term limits, sunset clauses, and re-ratification requirements would apply?
How would the community measure whether the reform is actually improving Treasury governance?

These questions are not presented as a rejection of AtlasHub’s proposal. They are the next layer of design work RCADA believes is needed before any implementation proposal could be responsibly supported.

For RCADA, any future Treasury reform built around strategic entities, expert review, or thematic budgeting should be guided by minimum safeguards:

DRep and delegator oversight must remain central. Expert review should inform decisions, not replace accountable voting.
Authority must be narrow and explicit. Preparing, recommending, selecting, and implementing are different powers and should not be blurred.
Participation must be open and competitive. Funding access should not depend on proximity to insiders or institutions.
Conflicts of interest must be public and enforceable. Disclosure should be paired with recusal rules where direct conflicts exist.
Review logic must be transparent. Scores, assumptions, dissenting views, and recommendation criteria should be published.
Roles must be time-limited and reviewable. Any new body should include term limits, removal mechanisms, and sunset or re-ratification.
Small proposers must remain protected. A more professional process should not become so complex that only large organisations can participate.
The model should be piloted before becoming permanent. A trial cycle with public metrics would be safer than immediately embedding a standing structure.

These safeguards are RCADA’s own view of what would be needed for responsible implementation. They are informed by our governance values and the community concerns we have seen around accountability, open participation, conflicts of interest, transparency, decentralised oversight, and protection against insider gatekeeping. They are not presented as requirements already contained in the Info Action.

RCADA appreciates AtlasHub putting forward a structured starting point. The proposal does more than name the problem; it offers a possible sequence and budget framework that deserves further exploration. We would welcome deeper work on thematic budgeting, anti-bundling principles, project evaluation support, expert review design, and how a future Treasury process can remain both strategic and decentralised.

For these reasons, RCADA votes ABSTAIN. We support the need for Treasury governance reform and welcome further development of this proposal, but we are not ready to endorse the outlined model until the roles, safeguards, authority boundaries, and accountability mechanisms are more clearly defined.

RCADA has also prepared a companion deep-dive analysis to explore these trade-offs in more detail:
Reforming Cardano Treasury Governance: A Comparative Analysis and Reform Roadmap