Strike Finance V2 Treasury Deployment Proposal

This governance action requests a 12-month productive treasury deployment of 9,000,000 ADA into Strike Finance V2 liquidity infrastructure.

This is not grant funding. Treasury-owned capital would be deployed to deepen Cardano-native perpetual futures liquidity, increase on-chain trading activity, and generate yield for the Cardano Treasury.

Strike has processed over 1,130,000,000 USD in cumulative volume, facilitated 968,000+ trades across 3,071 unique traders, generated over 3,250,000 USD in profit for liquidity providers, produced over 1,160,000 USD in total protocol revenue, and represented over 50% of Cardano trading activity during the past six months.

The deployed ADA will be sold for USDM, Cardano's fiat-backed stablecoin, to provide stablecoin-denominated liquidity. For modeling, this proposal assumes ADA = 0.15 USD, making 9,000,000 ADA approximately 1,350,000 USDM of stablecoin liquidity. The actual USDM notional will depend on the conversion price at deployment and will be transparently reported.

Under conservative modeled assumptions, the deployment is expected to generate approximately 900,000 ADA-equivalent in annual yield. Assuming no ADA price change, this would increase the treasury-owned position from 9,000,000 ADA to approximately 9,900,000 ADA-equivalent over 12 months. These are modeled estimates, not guaranteed returns.

A council composed of Rami from Snek, Phil from Surf, and James from Moneta will serve as the administrator for this proposal. Operational custody of deployed liquidity will be handled through this independent multisig council. Strike Finance will not have unilateral custody or control of treasury assets.

Realized yield from the first six months will be returned to the Cardano Treasury at month 6. At month 12, 100% of treasury-owned deployed assets, including remaining principal and realized yield, will be returned to the Cardano Treasury. Any further treasury participation would require a new governance proposal.

Strike Finance Liquidity Growth Context

Perpetual futures markets represent one of the largest categories of global digital asset trading activity. More than 75% of cryptocurrency trading activity now occurs through perpetual futures markets.

If Cardano intends to compete as a globally relevant financial ecosystem, it needs derivatives infrastructure capable of supporting meaningful liquidity, strong execution, and sustained trader participation.

Today, a meaningful portion of derivatives trading demand from Cardano users leaves the Cardano ecosystem for centralized exchanges and competing blockchain ecosystems. This causes liquidity, fees, trader attention, and financial activity to move outside Cardano.

Strike Finance addresses this by providing Cardano-native perpetual futures infrastructure.

Demonstrated Demand

The demand has already been demonstrated. Strike has:

• Processed more than 1,148,000,000 USD in cumulative trading volume
• Facilitated more than 1,001,000 trades across 3,226 unique traders
• Generated more than 3,250,000 USD in profit for liquidity providers
• Produced more than 1,167,000 USD in total protocol revenue
• Accounted for more than 50% of Cardano trading activity over the past six months

The primary bottleneck to further growth is liquidity depth.

V2 Liquidity and Trading Activity

V2 data since launch shows the relationship between stablecoin liquidity and Strike trading activity. From V2 launch on 2026-03-20 through 2026-06-15, the protocol produced:

Monthly platform growth shows clear acceleration across volume, revenue, and trades as liquidity deepened:

The first fifteen days of June alone exceeded the entire month of May in both volume and revenue, putting V2 on a run rate of over 100,000,000 USD in monthly volume. Protocol revenue has grown every month since launch -- 2,083 USD in March, 4,249 USD in April, 8,917 USD in May, and 10,000 USD in just the first fifteen days of June -- tracking the growth in liquidity and volume directly.

Strike Liquidity Provider Vault

The Strike Liquidity Provider vault supporting V2 market making is live with two months of public performance history.

The vault's own history demonstrates the liquidity-to-volume flywheel directly. Vault total value locked grew from approximately 147,000 USD in early April to approximately 985,000 USD in the latest reported snapshot, and over that same period monthly V2 volume grew from 7,700,000 USD in April to 26,100,000 USD in May and 51,200,000 USD in just the first fifteen days of June.

Despite the vault growing more than sixfold, the annual percentage rate has increased to 43.52%, profit and loss is trending upward, and the vault maintains an all-time Sharpe ratio of 4.97 with a maximum drawdown of only 1.15%.

These figures do not prove that liquidity alone guarantees future volume or yield. They show that Strike V2 already has a measurable stablecoin liquidity flywheel: as available stablecoin liquidity increased, the protocol supported higher trading activity, fee generation, and a live vault with public performance history -- and yield did not compress as capital scaled.

Liquidity Flywheel

Greater liquidity supports tighter spreads, deeper execution, larger position capacity, better trader retention, more on-chain trading activity, more fee generation for liquidity providers, and stronger Cardano-native decentralized finance infrastructure.

This creates a direct ecosystem flywheel:

More liquidity -> better execution -> more traders -> more volume -> more yield -> stronger Cardano decentralized finance

This proposal gives the Cardano Treasury a way to become more productive. Instead of leaving a portion of treasury assets idle, treasury capital can be deployed into transparent Cardano-native liquidity infrastructure with the objective of earning yield for the ecosystem.

In compliance with Section 7 Treasury Withdrawals of the Cardano Constitution Action Standards, any ADA received from the treasury withdrawal that is held by the administrator prior to deployment will be kept in one or more separate accounts that can be audited by the Cardano Community. Such accounts will not be delegated to any stake pool operator and will be delegated to the predefined abstain voting option.

This structure helps keep value creation inside Cardano rather than allowing trading activity, liquidity demand, and yield opportunities to migrate to other chains or centralized venues.

Market Context

Perpetual futures are one of crypto's clearest examples of product-market fit. Top-10 perpetual exchanges processed 92.9 trillion USD in 2025 (+64.6% year over year), and the top decentralized perpetual exchanges averaged over 611 billion USD in monthly volume in the first four months of 2026, holding 13.5% of total crypto open interest. Liquidity concentrates where execution is deepest and spreads are tightest. If Cardano does not support competitive perpetual futures infrastructure, trading activity, fees, liquidity demand, and user attention will continue to leave the ecosystem for centralized exchanges and other chains.

Strike's Organic Growth

Strike Finance has already reached meaningful scale without a treasury-backed liquidity program: 1,130,619,017 USD cumulative volume, 968,011 trades, 3,071 unique traders, 1,162,630 USD total protocol revenue, 3,254,391 USD in liquidity provider profit, and over 50% of Cardano trading activity over the last six months.

Ethereum ecosystem users already account for approximately 50% of Strike's trading volume, and Strike's largest trader by volume came from the Ethereum ecosystem. This shows that external traders will use Cardano-native infrastructure when product and liquidity meet their needs.

This is strong organic traction inside Cardano, but small against the global market: DeFiLlama reports approximately 588 billion USD in 30-day decentralized perpetual futures volume, with the largest protocol alone at approximately 188 billion USD. Strike does not need treasury support because demand is unproven. Strike needs deeper liquidity because product-market fit exists, and liquidity is the main constraint preventing Cardano-native perpetual futures from competing at larger scale.

12-Month Objective

This proposal is a temporary liquidity acceleration mechanism, not permanent treasury dependency. By the end of the 12-month deployment, Strike aims to rank as a top-20 perpetual futures protocol across the broader crypto market, measured by public rankings such as DeFiLlama's perpetual futures leaderboard, with enough liquidity depth, external trader participation, and momentum to continue scaling without additional treasury assistance. If the deployment does not produce a credible path toward top-20 competitiveness, renewal should not be assumed; any continued participation requires a new governance proposal with updated performance data.

Terms, Deployment, and Yield

The deployed ADA will be sold for USDM at deployment to provide stablecoin-denominated liquidity, executed in an orderly manner to minimize market impact. Modeling at ADA = 0.15 USD: approximately 1,350,000 USDM deployed at a modeled 10% USD-denominated annual percentage rate, generating approximately 135,000 USD / 900,000 ADA-equivalent in annual yield. These are modeled estimates, not guaranteed returns. Realized yield from the first six months is returned to the Cardano Treasury at month 6. At month 12, 100% of treasury-owned deployed assets, including remaining principal and realized yield, will be returned to the Cardano Treasury.

Administration, Custody, and Oversight

Administrator: Independent council. A council composed of Rami from Snek, Phil from Surf, and James from Monetra will receive the treasury withdrawal, hold funds prior to deployment, and oversee disbursement in line with this proposal.

In compliance with Section 7 Treasury Withdrawals of the Cardano Constitution Action Standards, any ADA held by the administrator prior to further disbursement will be kept in one or more separate accounts auditable by the Cardano Community, will not be delegated to any stake pool operator, and will be delegated to the predefined abstain voting option. The designated holding account(s) will be published prior to on-chain submission.

Operational custody of deployed liquidity will be governed by an independent multisig with Rami from Snek, Phil from Surf, and James from Monetra. Strike Finance will not have unilateral access to treasury funds during the deployment period. Treasury principal remains ecosystem-owned, deployment activity remains publicly auditable, realized and unrealized profit and loss are reported separately, and any material risk event must be disclosed.

Independent Audit and Assurance

Strike V2 is live on mainnet with public performance history. The protocol has undergone several unofficial reviews by individual technical reviewers. Christian Schmitz, founder of the Helios programming language and Pulse, is currently conducting an official audit of the protocol, which is expected to be finalized by July 1, 2026. The report will be published upon completion.

Independent third-party assurance reports will accompany deployment confirmation, the month-6 yield distribution, and the month-12 return of funds, verifying balances, profit and loss, drawdown, and distributions against on-chain data.

Previous Treasury Funding

Strike Finance has never received funding from the Cardano Treasury or any related ecosystem treasury program, including within the last 24 months. This is Strike Finance's first treasury proposal.

Risk Summary

The treasury may earn less than modeled, experience drawdown, or underperform a simple hold-ADA strategy. Primary risks: ADA price appreciation risk (deployed ADA is sold for USDM and may underperform holding ADA if ADA rises significantly); USDM depeg, custody, liquidity, or redemption risk; smart contract risk; yield underperformance from market conditions; and custody and operational risk around multisig coordination. Governance review is triggered if drawdown exceeds 8%, if reporting is missed for two consecutive monthly cycles, or if any unresolved custody, accounting, stablecoin, redemption, or smart contract concern arises; mandatory review at 10% drawdown.

Early Termination and Return of Funds

In any wind-down: positions are exited in an orderly manner, all treasury-owned assets (principal plus realized yield, minus any realized losses) are returned to the designated administrator account, and an audited reconciliation report is published within 30 days. The independent multisig -- not Strike Finance -- controls wind-down execution, so return of funds does not depend on Strike Finance's cooperation.

Net Change Limit

This proposal fits within the current 2026 Net Change Limit. Because this is a productive deployment with 100% of principal plus realized yield contractually returned within 12 months, the net long-term impact on the treasury is expected to be positive rather than a net outflow.

Success Metrics

Success will be measured across three platform metrics: volume, traders, and revenue.

Reporting and Value to Cardano

Strike Finance will provide monthly public transparency reports covering deployment status, liquidity utilization, volume, open interest, realized and unrealized profit and loss, yield, drawdown, stablecoin exposure, market quality metrics, distributions, and any material risks or deviations. This proposal benefits Cardano by deepening Cardano-native liquidity, keeping derivatives activity inside Cardano, improving execution quality, generating yield for the Treasury, and creating a measurable model for productive treasury deployments. At the end of the 12-month period, the full treasury-owned position and all remaining realized yield will be returned to the Cardano Treasury.