{ "@context": { "@language": "en-us", "CIP100": "https://github.com/cardano-foundation/CIPs/blob/master/CIP-0100/README.md#", "CIP136": "https://github.com/cardano-foundation/CIPs/blob/master/CIP-0136/README.md#", "hashAlgorithm": "CIP100:hashAlgorithm", "body": { "@id": "CIP136:body", "@context": { "references": { "@id": "CIP100:references", "@container": "@set", "@context": { "GovernanceMetadata": "CIP100:GovernanceMetadataReference", "Other": "CIP100:OtherReference", "label": "CIP100:reference-label", "uri": "CIP100:reference-uri", "RelevantArticles": "CIP136:RelevantArticles" } }, "summary": "CIP136:summary", "rationaleStatement": "CIP136:rationaleStatement", "precedentDiscussion": "CIP136:precedentDiscussion", "counterargumentDiscussion": "CIP136:counterargumentDiscussion", "conclusion": "CIP136:conclusion", "internalVote": { "@id": "CIP136:internalVote", "@container": "@set", "@context": { "constitutional": "CIP136:constitutional", "unconstitutional": "CIP136:unconstitutional", "abstain": "CIP136:abstain", "didNotVote": "CIP136:didNotVote", "againstVote": "CIP136:againstVote" } } } }, "authors": { "@id": "CIP100:authors", "@container": "@set", "@context": { "did": "@id", "name": "http://xmlns.com/foaf/0.1/name", "witness": { "@id": "CIP100:witness", "@context": { "witnessAlgorithm": "CIP100:witnessAlgorithm", "publicKey": "CIP100:publicKey", "signature": "CIP100:signature" } } } } }, "hashAlgorithm": "blake2b-256", "body": { "govActionId": "gov_action1hkgl5l4fknsf7aktmcatkz6kfl7xpvn7rzh5vnxwexl0n3cc6zrsqt5459v", "summary": "Tingvard judges the “Cardano Summit 2026 and TOKEN2049 Singapore” treasury withdrawal governance action unconstitutional.", "rationaleStatement": "This governance action is submitted as a Treasury Withdrawal under Article II, Section 7 of the Cardano Constitution. It requests a total of 14,076,539 ada (USD 3,659,900), consisting of two components:\n9,615,385 ada (USD 2,500,000) for the Cardano Summit 2026 managed by the Cardano Foundation, and\n4,461,154 ada (USD 1,159,900) for TOKEN2049 sponsorship managed by EMURGO.\nTingvard assesses the constitutionality of the governance action as a whole. Where a governance action contains separable allocations with distinct purposes and justifications, each component should demonstrate alignment with the requirements of the Constitution. A material concern in any component may affect the assessment of the governance action in its entirety.\nThe proposal satisfies the formal requirements of Article II, Section 7, §1 through §6. It specifies the purpose of the withdrawal, delivery period, cost breakdown, refund conditions, prior funding disclosures, audit provisions, and administrative structure. The use of smart contract-based fund management, milestone-based disbursement, and public reporting mechanisms further supports procedural compliance.\nThe Cardano Foundation component requests 9,615,385 ada (USD 2,500,000) for the Cardano Summit 2026. This represents a notable increase relative to the previously presented financial model for the Summit, which outlined an expected cost of approximately 4,615,385 ada (USD 1,200,000) for 2026 as part of a trajectory toward reduced costs and increasing financial sustainability.\nThe proposal provides additional strategic context for the 2026 Summit, including a shift toward higher-impact positioning, co-location with a major industry event, and increased focus on institutional engagement. It also includes Key Performance Indicators relating to attendance, enterprise engagement, and ecosystem activity.\nThese elements contribute positively to the clarity of intent and delivery expectations.\nHowever, while a revised strategic approach is described, Tingvard is unable to identify a sufficiently clear linkage between this shift in strategy and the magnitude of the increase in requested resources. The proposal does not clearly explain how the change in format, positioning, or scope results in a cost increase from approximately USD 1,200,000 to USD 2,500,000 for the Summit.\nThe objectives and expected outcomes, including ecosystem engagement, institutional exposure, and global reach, remain broadly consistent with those previously articulated. While the positioning of the event has evolved, the proposal does not provide a clear comparative framing that would allow the community to assess whether the increase in resource allocation is proportional to the change in approach.\nTingvard emphasizes that this is not an assessment of whether the proposed budget is appropriate in absolute terms, nor a judgment on return on investment. Such considerations fall within the mandate of DReps. Rather, the assessment concerns whether the proposal provides sufficient context on-chain to support a determination that the use of resources is reasonable within the meaning of Article I, Section 1, Tenet 8.\nTaken together, the increase in cost, the departure from the previously communicated cost trajectory, and the absence of a clearly articulated connection between revised strategy and resource requirements make it difficult to determine whether the proposed use of resources can be considered reasonable.\nAs each component of a Treasury Withdrawal should demonstrate alignment with the Constitution, this uncertainty in the Cardano Foundation component affects the assessment of the governance action as a whole.", "precedentDiscussion": "This decision affirms that procedural compliance with Article II, Section 7 is necessary but not, on its own, sufficient for constitutionality. The guiding Tenets in Article I remain relevant to the assessment of Treasury Withdrawals.\nIt further clarifies that prior financial models are not binding, but form part of the context in which reasonableness under Tenet 8 may be evaluated. Where proposals introduce a materially different cost structure, it is important that the relationship between strategy, scope, and resource requirements is clearly articulated.", "counterargumentDiscussion": "It may be argued that the proposal satisfies all formal requirements under Article II, Section 7 and therefore should be considered constitutional. Tingvard agrees that the proposal demonstrates strong procedural compliance. However, Tenet 8 introduces an additional standard concerning reasonable use of resources, which requires consideration of context beyond formal structure. \nHistorically there have been variants in research literature of this tenet 8, such as reflected in IOGs research on 11 blockchain tenets where a similar tenet was described as “no resources will be unnecessarily spent”, and pointing to “finding the best algorithm for the given task is important for this tenet.” During constitution drafting the term Net Change Limit (NCL) was introduced, and the NCL reflected a wish for treasury resources not to be expended wastefully by adding a politically decided limit. The wording is slightly different in the Cardano constitution Tenet 8 with the criteria of “not unreasonably spend resources” suggesting that it should be relative to what could be seen as reasonable and related to all types of resources. It is clear by the meaning of the word reasonable that it could be judged relative to proposals of treasury withdrawals of similar character to judge what is fair or appropriate. \nIn such a view of the constitution as a whole, one could interpret tenet 8 to be a wider protection against resources than the NCL (in its definition it talks about the maximum allowed removed in a given period), and covering cases not covered by the absolute amount of the NCL but related to unreasonable withdrawals for each treasury withdrawal on top of its function against wasteful algorithms. The burden of proof should be on the proposer of the treasury withdrawal to argue why a withdrawal is reasonable both for the DRep political decision but also relative to the wider coverage of what is reasonable spending of resources in tenet 8 so the counterview author agrees with the majority view that context of the proposal is relevant to judging its reasonable resource spending and that tenet 8 can cover situations such as a treasury withdrawals reasonable expenditure of ADA. \nSince there is an overall limit set politically in the NCL this suggests one should be careful to interpret this tenet to cover what is part of the DReps subjective decision, and should be interpreted to what is more objectively unreasonable - else the CC risks being more of a political factor than a constitutional judging factor. It is the DRep role to argue about more subjective criteria on what to prioritize or how realistic a proposal is to achieve its goals. It would however be within tenet 8 to judge a treasury withdrawal of what is fair or appropriate relative to similar proposals or related to the rest of the legal framework the governance action is part of. But this should be done with the context of the proposal in question, and what the context of what it is compared with as well if a comparison is made to judge if reasonable. An example of a clearly unreasonable treasury withdrawal from an objective standpoint and related to the blockchain itself would be to withdraw the full amount of the treasury without any plan for node operation and the security of the blockchain to continue functioning, thus breaking several of the other tenets, as well as risk the continued operation of the Cardano blockchain.\nThere are some indications to the treasury withdrawal being unreasonable relative to similar proposals, with an over doubling of costs, and relative to the estimated expected costs by the proposers previous own documentation. However there are also indications of difference in location and format, as well of time between the previous proposals estimated costs and current estimates are matters that all could change the costs of expenditure, and a too harsh comparison from one years proposals to another gives away some of the flexibility the community should have in changing plans. In the counterargument, weight has been put on having clear objective criteria for unreasonable expenditures of resources due to the risk arbitrariness.\nWith arbitrariness we risk the predictability of rulings, how credible they are seen and finally the stability of the economic rules that in turn risks lowering the economic growth of the ecosystem (red tape), so while there might be some additional costs in having leeway in what is considered fair and adequate resource spending we also reduce the risk of arbitrariness since context interpretations are by its nature to some degree subjective, and that also has economic advantages for the governance system as a whole. An example of such arbitrariness would be to fail to account for what could be considered fair and appropriate increases in costs such as those due to inflation and with some room for error in estimates from a year to another, or increase in costs of change in location as well as benefits of such locations for events, without such context in what is reasonable, it can arbitrary reduce the flexibility of proposers to change plans from year to year that could be a net beneficial use of resources for the community.\nOn the other hand if there was a trend of more and more unreasonable proposals over time in the sense of stretching what is considered fair and appropriate due to a lack of a functional DRep ecosystem or similar, we also risk the trust in the governance actions so Tenet 8 should not be too narrowly interpreted either. Facts will always have some element of subjective interpretation, and having too wide a leeway risks breaking one of the reasons for tenet 8 to protect the blockchain itself by ensuring we do not waste our resources.\nThe majority view emphasizes the burden of proof is on the proposer and argues that no clear linkage has been shown between the shift in strategy and magnitude of the increased in requested resources. \n It may also be argued that the revised strategy justifies a higher cost. Tingvard acknowledges that changes in positioning and scope may increase both impact and cost. However, in order to support evaluation under the Constitution, the proposal should more clearly articulate how these factors translate into the specific level of requested funding.", "conclusion": "For these reasons, Tingvard judges the “Cardano Summit 2026 and TOKEN2049 Singapore” treasury withdrawal governance action unconstitutional, as the Cardano Foundation component does not sufficiently demonstrate reasonable use of treasury resources under Article I, Section 1, Tenet 8 of the Cardano Constitution.", "internalVote": { "constitutional": 1, "unconstitutional": 4, "abstain": 0, "didNotVote": 0, "againstVote": 0 }, "references": [ { "@type": "RelevantArticles", "label": "CARDANO BLOCKCHAIN ECOSYSTEM CONSTITUTION", "uri": "https://ipfs.io/ipfs/bafkreieyuknozbtewyurfqoagvplvykadn6a4u6wglupavdz46bbsnnl6e" } ] }, "authors": [ { "name": "Tingvard" } ] }