Cardano Treasury

Treasury Withdrawal Strategy

I’ve made a mathematical model of the Treasury income for the next 10 years.

Current Treasury yearly income is about 300 million ADA. In 5 years it drops down to 125 million ADA per year. And in 10 years it’s about 40 million ADA.

My thoughts on the Treasury withdrawals as a DRep and Cardano developer:

1. I don’t mind once a year withdrawals. I think @radioastro made good arguments why this is OK during Cardano Summit presentation on Governance. It’s easier to plan, to vote, to hedge against the price volatility, etc.
2. I’m against the idea of random withdrawals from the current Treasury. Treasury withdrawals should be sustainable. Thus we need a strategy.
3. I suggest a maximum yearly governance budget to be all the Treasury yearly income + 10% of the current Treasury. The exact percentage can be debated but this approach is sustainable and allows for the Treasury to decrease forever.
4. We can adjust the Treasury expenditure percent from 10% to -10% and it will go with the surplus.
5. Right now I think we can spend some of the accrued Treasury as an investment into Cardano adoption. Maybe even 20% a year if it’s well argumented. As price goes up we can change to surplus. Think of this treasury expenditure percent as a meta-protocol parameter.

Why No Staking For Treasury Withdrawals

The Treasury withdrawals should not be staked.

According to Cardano Shelly specification, staking rewards are taken from the Reward pot, which is filled by the Reserves and Fees pots.

When Treasury withdrawals are staked, the rewards are taken from the Rewards pot to Reward accounts. Thus less money goes to Treasury.

This means that by staking the Treasury withdrawals we are decreasing Treasury income, essentially taking money from Treasury twice.

No Voting With Treasury Withdrawals

Well, I think that’s obvious. Intersect should not vote with Treasury withdrawals.

Delegate

If you like what I’m doing, please, consider delegating your voting power to me:

CIP-105: drep1k4h4cd5jknvcfeq5uuzqthpl7sdjxrwf9gn25tdk49qxyfhusgm

CIP-129: drep1y26k7hpkj26dnp8yznnsgpwu8l6pkgcdey4zd23dk655qcse26y3g

Here is how to do that

And vote for our Catalyst proposals! Search LANTR.