Cardano proposed a budget of 70 million ADA, accelerating ecosystem development after the chain split event.

Core entities of the Cardano ecosystem jointly proposed a key infrastructure budget of 70 million ADA (approximately 35 million USD) aimed at improving core facilities such as stablecoin integration and institutional-grade custody. This proposal comes after the network successfully handled a chain split event triggered by AI, demonstrating the ecosystem's technical resilience and development determination. The budget proposal must ultimately be approved by both DReps and the Constitutional Committee, becoming an important touchstone for Cardano's decentralized governance.

Strategic Layout of the 70 Million ADA Budget Proposal

The five core entities of the Cardano ecosystem—Input Output, EMURGO, Cardano Foundation, Intersect, and Midnight Foundation—rarely join forces to jointly propose a key integration budget proposal. This fund of 70 million ADA will be specifically used to fill critical gaps in the ecosystem, focusing on infrastructure areas such as Level 1 stablecoin integration, institutional-grade digital asset custody, cross-chain bridges, pricing oracles, and on-chain analytics platforms. The selection of these directions directly addresses the current developmental bottlenecks of Cardano, reflecting the builders' clear understanding of the future competitive landscape.

From the perspective of capital allocation logic, the integration of stablecoins is placed first due to profound market considerations. Although the market value of Cardano's stablecoin reached 42 million USD in 2025, representing a significant leap from nearly zero in 2021, this figure still seems insignificant compared to the global total market value of stablecoins, which is 308 billion USD. As the lifeblood of the DeFi ecosystem, the level of perfection of stablecoins directly determines the willingness of subsequent institutional capital to enter the market and the depth of ecological liquidity, which may be the fundamental reason for prioritizing it in the budget proposal.

The approval process for the budget proposal fully reflects Cardano's unique governance philosophy. Proposals require dual approval from both Delegated Representatives (DReps) and the Constitutional Committee, a mechanism that ensures community involvement while maintaining the professionalism and compliance of decision-making. Intersect will be responsible for the specific implementation of the project, committing to maintain transparency and accountability throughout the process, which helps alleviate community concerns about the efficiency of fund usage. According to document disclosures, the Cardano treasury currently holds approximately 1.7 billion ADA and adds about 25.92 million ADA monthly through protocol mechanisms, providing a solid financial foundation for the budget proposal.

Key Infrastructure Budget Allocation Focus

Total budget: 70 million ADA

Core areas: stablecoin integration, institutional custody, cross-chain bridges, oracles, analytics platform

Governance Process: DReps Voting + Constitutional Committee Review

Implementing agency: Intersect

Treasury background: 1.7 billion ADA reserves, with a monthly increase of 25.92 million ADA

Strategic goal: Enhance DeFi competitiveness, attract institutional funds

Cardano Chain Split Event and Technical Resilience Verification

The chain split event that occurred on November 21 provided an important contextual backdrop for this budget proposal. The incident was triggered by a developer using AI tools to generate malformed transactions during testing, inadvertently exploiting a vulnerability that allowed oversized hashes to bypass transaction verification. This edge case had not been detected in previous node versions and regular testing tools, highlighting the general vulnerability of blockchain systems when faced with new attack vectors, and demonstrating the necessity of continuous stress testing.

Although the incident caused multiple wallets and decentralized applications to be temporarily inaccessible, the core function of the network—block production—was never interrupted. Node operators responded quickly, restoring consensus and completing chain merging in a short period by updating node software. The entire processing demonstrated the strong technical coordination ability and emergency response mechanism of the Cardano community, and this performance under pressure even earned the recognition of competitors, with Solana co-founder Anatoly Yakovenko publicly praising the Ouroboros protocol for maintaining network stability during the incident.

Cardano founder Charles Hoskinson revealed after the incident that the technical fix was deployed within a day and hinted at possible further actions against the exploiters. This rapid response capability is attributed to Cardano's rigorous academic research methodology and formal verification tradition, which, although often criticized for slow progress, demonstrates unique advantages in handling critical security incidents. Ultimately, the incident not only did not weaken market confidence but instead strengthened investors' perception of the network's resilience.

Observing on-chain data, large holders continued to increase their holdings of ADA at key technical support levels after the event, indicating that institutional investors view this event as a normal episode in the process of technical maturity rather than a systemic risk. This calm market reaction resonates with Cardano's consistent emphasis on the philosophy of “stability over speed” and creates a favorable environment for upcoming infrastructure investments.

Cardano Decentralization Governance and Community Review Focus

The process of reviewing the budget proposal is becoming the best window for observing the maturity of Cardano's governance mechanism. The delegated representative (DReps) system, as a long-term evolution of the SanchoNet testnet, is facing a test of such large-scale financial decision-making for the first time. Representatives need to balance short-term community demands with long-term ecological value, finding the optimal solution between technical feasibility and economic rationality, which poses a severe challenge to the on-chain governance system that is still in its early stages.

The most heated focus in community discussions is on the true cost structure of the budget proposal. Some analysts point out that 70 million ADA may only be the project's direct expenses, while ecological support investments, opportunity costs, and subsequent maintenance fees could make the total cost far exceed this figure. At the same time, reports indicate that the founding entity may need to cover additional costs out of pocket, which will become an important consideration for voters. This in-depth discussion of details reflects the gradually maturing governance culture of the Cardano community and highlights the value of budget transparency discussions.

The Constitutional Committee will focus on the consistency of proposals with Cardano's constitutional principles during the approval process, ensuring that the use of funds aligns with the overall ecological interests rather than specific groups. This institutional design aims to prevent governance attacks and fund misuse, which is a core feature that distinguishes Cardano from other public chain governance models. As the voting approaches, various stakeholders are expressing their views through community forums, social media, and offline events, creating a multi-layered and multi-dimensional public discussion space.

Historically, the Cardano community has typically shown a cautiously optimistic attitude towards major decisions. Although there are differences regarding specific technical implementation plans, there is a basic consensus within the community on the necessity of infrastructure development. The ultimate fate of the budget proposal not only concerns the allocation of funds but will also define the effectiveness of the Cardano governance model at critical moments, accumulating practical experience for more complex decisions in the future.

The Prospects of Cardano's Ecosystem Development and the Evolution of Market Positioning

After the budget proposal is passed, the ecological development path of Cardano will show a significant acceleration trend. The improvement of stablecoin integration will directly activate the potential demand of the DeFi ecosystem, providing key infrastructure for DEX, lending protocols, and derivatives platforms. The introduction of institutional-grade custody solutions aims to address the entry barriers of traditional financial assets, preparing the technology for the tokenization wave of RWA (real-world assets). The cumulative effect of these foundational capabilities may gradually emerge by 2026, reshaping Cardano's position in the public chain competitive landscape.

The strengthening of middleware layers such as cross-chain bridges and oracles will further enhance Cardano's connectivity with external ecosystems. Especially after the strategic directions of Midnight sidechain deployment and Bitcoin DeFi integration have been clarified, the quality of cross-chain infrastructure directly determines the extent of multi-chain synergy. From the perspective of industry development trends, 2026 is likely to become a decisive year for cross-chain interoperability, and Cardano's increased investment at this time reflects strategic foresight.

From a market positioning perspective, Cardano is transitioning from an “academic research-oriented public chain” to an “institution-friendly infrastructure.” The clear institutional service orientation in the budget proposal resonates with the eight-digit ADA stablecoin liquidity plan committed by the Cardano Foundation, creating a comprehensive blueprint for institutional services. Although this positioning shift faces competition from strong rivals like Ethereum and Solana, it also creates a differentiated advantage for Cardano in specific niche markets.

In the long term, the success or failure of Cardano hinges on whether it can translate its technological advantages into ecological prosperity. The various areas covered by the budget proposal point towards the practical application and enhancement of user experience, and this pragmatic shift aligns with the major trend in the industry of transitioning from technical validation to value creation. If executed smoothly, 2026 could become a pivotal year for Cardano's transformation from a “potential stock” to a “strong player,” laying the foundation for development in the next cycle.

The 70 million ADA budget proposal is both an accelerator for the Cardano ecosystem and a touchstone for its governance model. After successfully responding to the chain split incident, the community's demonstrated technical resilience and collaborative spirit have created favorable conditions for large-scale investment. With the improvement of key infrastructures such as stablecoins and cross-chain bridges, Cardano is expected to carve out a unique advantage in institutional adoption and the RWA track. The voting results of the budget proposal will not only determine the flow of funds but also define the development trajectory of Cardano for the next few years. In the context of intensifying competition among public chains, this is a crucial decision that affects the fate of the ecosystem.