- Cardano’s Big Pey questions spending 350M ADA now, citing immature governance tools and a potential ADA price increase.
- Voting tool issues hindered secure key holders, with a rushed new platform adding to process concerns.
- Relying on inflation-linked staking rewards for income is deemed unreliable for large treasury spending.
Cardano’s management of its treasury and the nascent governance process has come under intense scrutiny. Prominent community member Big Pey believes spending 350 million ADA of the treasury to fund various projects in 2025 is risky, especially in the early stages of decentralized governance.
I’ll be honest with you guys, I think ADA is about to run to $2-3, and we shouldn’t spend 350M of Cardano’s treasury before it does. While I believe there are many competent entities, dReps, and individuals in our community, I do not think we currently have an effective/efficient governance process or the required tooling to distribute 350M ADA.
According to him, the current governance tools and processes are not mature enough to deliver efficient and effective allocations of such a substantial amount. He also believes Cardano is poised for a price surge in tandem with the broader market conditions, so spending such a huge amount prior to that would be a bad idea.
Big Pey highlighted the challenges in the tooling and process. First, dReps, or Delegated Representatives, use CLI (Command Line Interface), a common practice for many stake pool operators, to protect their voting power. Secondly, majority members uses Gov(dot)tools, a platform where stakeholders vote for which projects would receive funds from the treasury.
Cardano Governance: Concerns Over Inflation-Tied Income
However, this website have a problem: people who kept their voting keys using CLI can no longer use it. Only people who kept their keys in an online wallet could vote. On top of that, the abrupt introduction of Ekklesia on a weekend gave validators like Big Pey little time to learn and cast their vote using the new tool. Many were using the old Gov(dot) tools, believing it is the official way to vote.
Furthermore, he argues that staking reward tax is not a reliable indicator for consistent income, as it’s tied to inflation and not actual transaction volume.
Considering all these issues, Big Pey thinks that the tools and the process are currently not ready to spend such a big amount, like 350 million ADA. Instead, he suggests spending a 200 million ADA budget for 2025 would be fiscally responsible, as it represents a 42% reduction in ADA expenditure in 2025.
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