Cardano submitted a $225 million budget plan to fund the ecosystem’s growth, seeking to allocate 275 million ADA towards protocol development, zero-knowledge technology, and other strategic initiatives. However, the proposal’s approval is contingent upon a vote by key governance members, including delegated representatives (DReps) and the Intersect Civics Committee (ICC).
Community Pushback Against the Proposal
Despite the ambitious scope, the proposal has faced stiff opposition from notable community members. Cardano whale, a prominent stakeholder, publicly voted against the budget, citing concerns over potential wasteful spending and inflation risks. He emphasized that while Bitcoin’s inflation rate is under 1%, Cardano’s is currently below 2%, warning that increased treasury spending could dilute ADA’s value.
As many of us expected, the NCL thus becomes the target and Intersect just put a gargantuan 275m ADA budget info action on-chain. I voted against.
— whale (@cardano_whale) May 12, 2025
I have repeatedly explained – presumably on behalf of a few more people than just my little old self – not to play it like this.…
The whale further argued that the proposal bundles 39 initiatives into a single vote, potentially obscuring individual risks and allowing for less scrutiny. “This spending path we are on is the single biggest risk to Cardano currently,” he stated.
Not fully. I think the 7.5m bundle of Midgard, Starstream, Blockfrost is on point and effective. But much bigger items should not be bundled with many smaller ones to get a lot of unnecessary spending that wouldn’t survive direct on-chain votes across the finish line
— whale (@cardano_whale) May 13, 2025
Supporters Defend the Funding Strategy
On the other hand, some community members support the funding plan, suggesting that responsible disbursement over time could mitigate inflation concerns. They referenced Cardano founder Charles Hoskinson’s assertion that sell pressure would remain modest if funds are dispersed strategically. Hoskinson also emphasized the importance of making bold investments now to avoid falling behind in the blockchain race.
Also Read: Cardano [ADA] Surges After $880K Short Liquidations — What’s Next?
Voting Deadline and Market Sentiment
Voting on the proposal is set to conclude on June 14th. As of now, only 7% of DReps have cast ‘NO’ votes, with 92% yet to make their decision. To pass, the proposal must secure over 50% approval from DReps alongside support from the constitutional committee.
Despite the ongoing debate, ADA’s market sentiment remains positive, with overall weighted sentiment rising. Meanwhile, ADA’s price recovery in May appears poised to test the $0.80 resistance level, potentially setting the stage for further gains if bulls can reclaim this key zone.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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