DeepStatecraft

Most people believe loans from the Cardano Treasury should be collateralized. I’m not so sure. In the recent poll, I leaned toward “It depends...” I think we should treat the Treasury like a strategic investor willing to take calculated risks to support ecosystem growth. Many teams seeking Treasury support likely don’t have collateral. If we make it a strict requirement, we risk shutting out innovation and early-stage development. And if a project does have collateral, it could simply borrow through DeFi instead of the Treasury. Crypto volatility adds another layer of complexity. Imagine taking a loan when ADA is $0.30 and repaying it in three years when ADA hits $3. That’s a 10x increase in dollar terms, possibly unmanageable. But the reverse is also true: a team could borrow now, sell at the top, and repay when ADA drops, profiting without even deploying the funds. This volatility affects all funding decisions, not just loans. What matters most is whether the team can generate revenue and repay the loan. DReps should weigh the potential ecosystem impact against the risk of default. Measuring impact is tricky. For example, on-chain activity can spike for many reasons, and it’s hard to tie success to a single investment. That’s why proposals must include data-driven forecasts: expected revenue, measurable impact, and concrete KPIs. With this, DReps can better assess risk and relevance. All funding should be milestone-based. Like in Catalyst, teams shouldn’t receive the full amount upfront. Vitalik Buterin once proposed a system where milestones are verified by a group of people and payments are released via smart contracts. In Cardano, DReps could play that role. I understand those who voted YES to mandatory collateral. Financial discipline is important, and we may get there eventually. But right now, in this early phase, we need to be bold. We must balance responsibility with strategic risk-taking to drive progress. We’re in a race. Not just with other blockchains, but with emerging networks from tech giants. We may only have one cycle left to prove ourselves. Let’s not miss it. Open to discussion. As a DRep, I need clarity on what the community expects, and so do my fellow DReps.

Should teams provide collateral when borrowing from the Treasury? Feel free to provide a rationale.

On-chain governance is Cardano’s flagship narrative for this bull market. But we need to reflect on what that governance actually looks like. Our top DReps include two founding entities and two wallet providers. Is that truly the decentralized governance we want to showcase?

Using Yoroi? If you’ve delegated to its default DRep, you’re backing the largest DReps closely tied to another large DRep - EMURGO. For true decentralization, consider switching to an independent DRep.

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