Cardano Community Approves $71M Treasury Withdrawal for Core Protocol Development

The Cardano community has approved a major treasury withdrawal to fund protocol development, marking one of the largest decentralized blockchain funding decisions to date. On August 2, 2025, a governance proposal requesting 96 million ADA (approximately $71 million) for Cardano’s core engineering team passed with 73.93% of voting support.

This milestone represents a major step in Cardano’s Voltaire era, where ADA holders directly influence the blockchain’s future through on-chain voting.

A Supermajority Vote Backs Core Development Funding

The approved proposal, titled “2025 Input Output Engineering Core Development,” was submitted by Input Output Engineering (IOE)—Cardano’s main development team. It received over 73% “yes” votes from Delegated Representatives (DReps), along with support from 5 out of 7 Constitutional Committee (CC) members and validation from stake pool operators (SPOs). Under Cardano’s governance rules, this supermajority clears the threshold for treasury funding.

Funds will be disbursed in phases, based on milestone completion and subject to smart contract-enforced transparency and third-party oversight. The legal and contractual aspects are being managed by Intersect, a member-based group that supports Cardano’s ecosystem.

How the $71M Will Be Used

The approved funding targets a broad range of technical goals tied to Cardano’s 2025 development roadmap. Key areas include:

• Protocol R&D: Advancing projects like Leios and Peras to boost throughput and reduce finality times.
• Scalability Solutions: Enhancing systems like Hydra (layer-2 scalability) and Mithril (fast syncing for lightweight clients).
• Smart Contract Enhancements: Expanding developer tools, Haskell libraries, and formal verification methods.
• Infrastructure Upgrades: Improving node diversity, updating fee mechanisms, refining SPO incentives, and bolstering testing frameworks.

IOE will collaborate with key technical partners such as MLabs, Vacuumlabs, dcSpark, TxPipe, Sundae Labs, and Well-Typed to deliver the planned upgrades.

Community-Led Governance in Action

This vote is part of a larger governance cycle involving 39 treasury proposals totaling about 275 million ADA (~$200 million). These initiatives emerged from a community-driven budgeting process and include funding for scaling tech, developer tools, governance systems, and adoption programs.

Alongside the IOE proposal, other key proposals that have passed so far include:

• Catalyst 2025 Proposal: Focuses on sustainable innovation funding and governance evolution.
• Midgard: Introduces optimistic rollups to improve transaction efficiency and cost.

Voting is ongoing for other proposals, with results expected by the end of Epoch 576 (August 17, 2025). ADA holders can track voting activity on platforms like gov.tools and Cexplorer.

Cardano’s treasury system represents a shift away from foundation-led grants toward fully decentralized funding. Treasury proposals must meet a high approval bar and receive community, SPO, and CC support to proceed. This structure ensures accountability and aligns funding with community priorities.

With more than $1 billion in total treasury reserves, future rounds of funding could reshape how open-source blockchain development is financed.

Proposals Still Under Consideration

As of early August 2025, Cardano’s community is actively progressing on 39 approved or proposed actions, chosen from hundreds of community submissions and refined during a June 2025 budget poll. These initiatives span far beyond protocol development, encompassing tooling, governance, scaling solutions, and ecosystem adoption strategies. While the core protocol proposal from Input Output Engineering, requesting ~96M ADA, has garnered the most attention, the collective funding across all initiatives reaches approximately 275M ADA. With dynamic on-chain voting still underway for several proposals, current treasury withdrawal progress stands at roughly 67%.

Proposal Name	Proposer	Requested Amount (ADA)	Brief Description	Status (as of Aug 4, 2025)
2025 Input Output Engineering Core Development	Input Output Engineering	~96M	Funds protocol R&D, scalability (e.g., Leios, Peras), smart contracts, and infrastructure upgrades.	Approved (73.93% yes)
Catalyst 2025 Proposal	Input Output	Not specified	Upgrades to Project Catalyst for sustainable funding and governance integration.	Approved
Midgard – Optimistic Rollups	Not specified	Not specified	Scaling solution using optimistic rollups for faster, cheaper transactions.	Approved
Hydra and Mithril Maintenance	Input Output	Not specified	Core scaling and fast-sync protocol development.	In voting
Tweag’s Haskell and Formal Verification	Tweag	Not specified	Maintains libraries for network stability and verification.	In voting
MLabs’ Developer Tooling (Plutarch, etc.)	MLabs	Not specified	Sustains tools for DApp and infrastructure development.	In voting
Leios	Input Output	Not specified	High-throughput protocol innovation for reduced finality.	In voting
Peras	Input Output	Not specified	Similar to Leios, focused on performance scaling.	In voting
Hardware Wallet Maintenance & Ledger Rewrite	Not specified	Not specified	Enhances security and access for hardware wallets.	In voting
Expanding Stablecoin / Native Asset Support	EMURGO	4M	Improves fiat ramps, wallets, and exchange support for assets like USDA.	In voting
Market Making & Listing Support Pool	Flowdesk (via Intersect)	3.1M	Boosts token liquidity and exchange listings.	In voting

Market Response and Ecosystem Outlook

News of the vote’s success contributed to a modest rebound in ADA’s price. Community sentiment appears strong, with voters showing confidence in IOE’s leadership and the broader technical roadmap.

As more proposals reach final votes in the coming weeks, Cardano’s experiment in on-chain governance continues to set precedents for decentralized ecosystems worldwide.