Cardano Treasury DeFi Liquidity Budget

The goal of this proposal is to increase liquidity on Cardano, specifically by supporting stablecoin liquidity. 50,000,000 ADA is requested over the course of 12 months (the duration of the budget) to support the Cardano decentralized finance (DeFi) ecosystem. The majority of the funds in this budget will be disbursed to DeFi protocols including decentralized exchanges (DEXs) and lending protocols to help seed liquidity on Cardano. The funds are managed by a 7 person administrating committee composed of publicly identified individuals who are part of multi-signature (multisig) wallet from which liquidity will be managed. This budget is proposed independent of other efforts since the goal of this budget is not to pay developers or companies for ecosystem improvements, rather to increase liquidity in the system overall. Further, unlike other proposals this budget serves as a revenue stream for the Cardano treasury since yields from DeFi protocols will be sent back to the Cardano treasury.

High Level Overview

• Amount - The Cardano treasury should dedicate 3.33% of treasury funds (50 million ada) to purchasing fiat backed stablecoins, spread out over 12 monthly purchases. The committee should make every effort to help mitigate the potential price impact of converting ADA to fiat to mint as stable coins over the 12 month period. Note that up to 35% of funds may be held in ADA to pair with ADA/Stablecoin pairs on DEXs, which will help to alleviate price impact concerns.
• Administration - A 7 person administrating committee will manage the treasury reserve using a multisig wallet (4 of 7 signature validation) to hold and deploy funds to protocols. The administrating committee will be responsible for working with stablecoin issuers to convert ADA to fiat backed stablecoins and deploying liquidity. A specific focus of the administrating committee will be analyzing approaches of deploying ADA to stablecoins in a way that minimizes ADA price impact.
• Revenue - Deployed funds will increase in value according to the interest and fees defined by the protocols fees are disbursed to. Each month the total interest generated by the deployed liquidity will be calculated and 15% of accumulated interest from protocols will be withdrawn from the respective protocols and sent back to the treasury, while the remaining 85% of accumulated interest will remain in the protocol (e.g. analagous but not identical to compounding interest). ADA held by the committee that is not deployed will not be staked according to constitutional requirements (see Rationale for more information).
• Deployment - DeFi protocols with at least 250,000 ADA worth of a stablecoin may apply to be recipients of minted stablecoin, and the administrating committee will review and disburse funds to protocols that have the best plans for growth and returns back to the treasury. A maximum of 2 or 3 protocols may be used per DeFi category to help minimize fragmentation. Applicants should make a strong case for the use of their protocol, including a a description of historical success, security, dedicated support for handling issues, and features of the protocol that will maximize the value to the Cardano treasury if liquidity is deployed to the protocol. New protocols will not be excluded for having limited history, but must make a strong case in other areas of the application.
• Strategy - The committee will deploy funds on a monthly basis in a way that minimizes ADA price impact and fees. A specific focus should be on deployment of liquidity that can be passively managed, meaning frequent adjustements are not needed. The focus on passive management is to help ease the management strategy and reduce the fees incurred by managing liquidity. This may be changed in the future by an on chain Info Action.
• Audits and Transparency - The committee is responsible for creating a monthly report or building a dashboard (or both) to describe the ADA held in reserve, the funds deployed to protocols, and all fees and other costs associated with managing the treasury. The committee may use part of the monthly budget to develop a dashboard to provide live updates of the stablecoin reserve for the Cardano community.
• Costs - Each member of the committee will be compensated $2,000/month in the fiat backed stablecoin of their choice ($14,000/month total for all committee members). The stablecoin reserve fund will cover the costs of minting fiat backed stables, deployment of liquidity to protocols, and rebalancing if needed. The committe will also use some funds to perform KYB/KYC of 3rd parties as needed as well as cover costs for creation of a legal entity to house the fund. Total costs per month should be capped at $50,000/month over the 12 month period. Any costs that extend beyond the budget period should be deducted from the accrued interest.
• Organization - Part of the initial budget will be used to investigate proper incorporation of a legal entity to house the funds being managed for this budget. Every reasonable attempt should be made to house the fund in a non-profit to maximize tax benefits as well as provide future opportunities for organizations to donate to the fund.
• Revisions - Since this fund may exist in perpetuity due to funds not being directly spent, it is important to have a mechanism for modification up to and including returning all funds back to the treasury. To this end, any member of the Cardano community may submit an Info Action to modify any aspect of this budget including members of the committee, monthly budget limits, committee pay, and returning some or all of funds back to the treasury. All members of the committee must commit to following any on chain Info Action that is passed by 67% of the community vote. If a committee member does not feel they can continue with their duties at any time, they must continue to carry out their duties until a suitable replacement is found according to the impeachment and replacement mechanisms described below.

Governing Committee

Term Limits

Community members have a maximum term limit of 2 years, after which they can re-apply for a second 2 year term. A minimum of 4 community members (not affiliated with founding entities) must be on the committee at all times.

Founding entities may have at most 1 person each on the committee. There are no term limits for committee members that represent a founding entity, but must still abide by the removal process of an Info Action or a majority vote of the other committee members.

Retirement and Impeachment

In the event that a committee member retires or their signing keys are exposed, the remaining members of the committee must create a new multisig address with the same policy (4 of 7) that removes the retired address. This process also gives the committee the capacity to impeach inactive members of the committee, as well as the ability for the community to impeach one or more members through an info action.

Community Feedback

The administrating committee members should make themselves available to feedback and questions from the Cardano community, and make attempts to make changes that incorporate reasonable feedback from the community. Feedback can be received through a Telegram channel, on Twitter, scheduled town hall meetings not more than once per month. The administrating committee should make attempts to incorporate feedback from the Cardano community, but are not obligated to do so. If the administrating committee does not respond or refuses to incorporate changes, the Cardano community may submit an on chain Info Action (that achieves 67% approval) to compel the committee to make changes up to and including removal of one or more members and/or returning some or all funds back to the treasury.

People

Below are 6 of the 7 members of the initial administrating committee. They range in experience and background to help ensure the long term success and sustainability of the stablecoin liquidity. There is an ongoing search for a 7th member of the committee and will be included in the withdrawal action.

1. Linda Roland (aka CryptoFly)
   • Twitter - @cryptofly777
   • YouTube - https://www.youtube.com/@lindacryptofly9182
   • About - Linda Roland is the operator of MALU Pool and has been actively contributing to the Cardano ecosystem since 2021. She’s a trusted DeFi consultant and advisor to multiple Cardano projects, known for her strategic insight and practical, user-focused thinking. Linda also creates educational videos to better inform the community of Cardano events, and improve visibility of Cardano projects. Her background is in industrial engineering and management with expertise in robotics, optimization, and supply chain logistics. She brings a strong mix of technical literacy, real-world experience, and genuine care for the people who make up Cardano.
2. Darren Camas (IPOR Labs)
   • Twitter - @DarrenCamas
   • LinkedIn - https://www.linkedin.com/in/dcamas/
   • About - Darren Camas has been involved with crypto & blockchain since 2011 advising, building, and investing in multiple projects. Currently he is CEO of IPOR Labs. He is also Co-founder of FoolFarm, the first AI venture builder in Europe. Previously he served as an advisor for the Cardano (ADA) blockchain, headed bizdev for one of the first global crypto exchanges, and has been recognized for his FinTech startups by institutions such as SWIFT and BBVA. On the institutional investor side he served as advisor to Emurgo, the venture arm of Cardano, and is an angel investor in blockchain startups. Originally from the US, he spends most of his time in emerging markets in Asia and Latin America.
3. Nick Schaub, Ph.D. (aka Elder Millenial)
   • Twitter - @ElderM
   • Discord - @theeldermillenial
   • LinkedIn - https://www.linkedin.com/in/nicholas-schaub-99876a67/
   • Google Scholar - https://scholar.google.com/citations?user=g8a__bIAAAAJ&hl
   • About - Dr. Nick Schaub is the founder of SteelSwap under the pseudonym Elder Millenial. He joined the Cardano community 4 years ago, and has been developing on Cardano for two years. He currently works with multiple DeFi protocols to perform analysis, optimization, and general advice on protocol owned liquidity management and development. His Ph.D. is in biomedical engineering, and he researches the use of artificial intelligence for medicine and biology from the design of novel architectures to development of agent swarms.
4. Giorgio Zinetti (Cardano Foundation)
   • Twitter – @giozzi
   • LinkedIn – https://www.linkedin.com/in/giorgio-zinetti
   • About – Giorgio Zinetti is the Chief Technology Officer at the Cardano Foundation, where he leads the organization's technical strategy and product development, leveraging open-source innovation to shape the future of enterprise blockchain solutions. A Web3 native and passionate advocate for decentralized finance (DeFi), Giorgio has been immersed in the blockchain space since 2015. His expertise spans the development and implementation of decentralized applications, smart contracts, and scalable blockchain infrastructures. Prior to his role at the Cardano Foundation, he co-founded and served as CTO of Procivis AG, a company pioneering digital identity solutions, and spent four years as a software engineer at UBS. Giorgio holds an MSc in Computer Science from Politecnico di Milano. Fluent in Italian, English, Spanish, and German, he combines technical acumen with strategic leadership to drive innovation in the blockchain ecosystem.
5. Massimo Morini, Ph.D.
   • Twitter – @TheAntinomist
   • LinkedIn – https://www.linkedin.com/in/massimo-morini-37a3246
   • About – Massimo Morini is a leading expert in blockchain economics and decentralized finance (DeFi), with a career spanning both traditional finance and the crypto industry. He has held prominent roles, including Chief Economist at the Algorand Foundation and Head of Interest Rates & Credit Models at Intesa Sanpaolo. Morini also served as a Senior Advisor to the World Bank and the Monetary Authority of Singapore. In academia, he is a professor at institutions such as the Università della Svizzera italiana (USI) in Lugano, Bocconi University, and the Polytechnic University of Milan, where he teaches courses on blockchain technologies, cryptocurrencies, and decentralized finance.
6. Darlington Wleh
   • Twitter - @LidoNation
   • LinkedIn - https://www.linkedin.com/in/profd2004/
   • About - Co-dreamer at Lido Nation — the Cardano-native team behind CatalystExplorer.com, 1694.io, and LidoNation.com. I’m an engineer by day, and at all times a dancer, humanitarian, idealist, and entrepreneur. With a strong foundation in cloud technologies, programming, and blockchain, I’m passionate about building tools and communities that make decentralized futures more accessible — and a little more fun.

Constitutionality of the Budget

Purpose: This proposal is for work intended to enhance the long term sustainability of Cardano by increasing stablecoin liquidity in the ecosystem.

Article III(5): This proposal fulfills this section of the Cardano Constitution by containing a Title, Abstract, Reason for Proposal (Motivation and Rationale), and Supporting Materials. An off-chain copy of this proposal can be found at https://raw.githubusercontent.com/theeldermillenial/2025-liquidity-budget/refs/heads/master/info.jsonld, and the document hash is attached to the transaction to fulfill the other requirements of this section. An easy to read version can be found at https://raw.githubusercontent.com/theeldermillenial/2025-liquidity-budget/refs/heads/master/README.md

Article IV(1): We propose that this budget span 73 epochs (roughly 1 calendar year).

Article IV(2): Disbursements for this budget must be made to a multi-signature (multisig) wallet composed of at least seven independent administrating members with at 4 of 7 signing policy. The process of overseeing funds then requires 4 of the 7 independent administrating members agree to disbursement of funds to DeFi protocols. The wallet must be the owner of any liquidity deposited into DeFi protocols, meaning liquidity tokens or any other assurance of liquidity must be held in the multisig wallet and should not be delegated to a third party, except as required for conversion of assets to fiat or minting of stablecoins. With this design, the committee will be the administrator of the budget funds and will directly oversee distribution of funds to protocols.

Article IV(3): At the time of submission, the NCL is currently at 350 million ADA and there is only one budget requesting 1.5 million ADA that has been submitted on chain through an info action. We believe that this removes a potential constitutional barrier for this proposal based on Article IV(3), since this proposal requests 50 million ADA of the potential remaining 348.5 million ADA.

Article IV(4): We budget 2,000 ADA/month (24,000 ADA total) to cover the costs of audits and transparency. The building of a dashboard and quarterly reporting in the proposed work also fulfill the obligations of this section. Since all funds will be managed from a single account, including all liquidity holdings and disbursement of monthly stipends for administrating committee members, we believe the dashboard and monthly reports are sufficient for auditing. To further strengthen our commitment to the auditing requirement, we also commit to any community driven requests for independent audits via an Info Action, and will use funds up to the $50,000/month budget to work with an independent auditor.

Article IV(5): The nature of the proposed work fulfills the first requirement of Article IV(5) of the constitution. The holding of all assets in the multisig account composed of 7 independent signers improves the ability of the Cardano community to easily audit and track actions taken by the committee. To fulfill the second part of the section, funds will not be delegated to an SPO and will be delegated to the predefined auto-abstain voting option.

TREASURY-04a: There is not on chain withdrawal action for this budget, and one will not be submitted unless this budget achieves the necessary 50% approval.