Cardano’s recent proposal to allocate $225 million has ignited significant discussion, raising questions about its potential impact on the ADA cryptocurrency.
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Cardano’s $225 million budget plan has sparked community debate.
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ADA was at a pivotal point and could surge to $1 if $0.8 became support.
On the 12th of May, Cardano submitted a 275 million ADA (about $225 million) budget plan to fund the ecosystem’s growth. The targeted initiatives include protocol development, zero-knowledge tech, and other expansion strategies.
However, for the proposal to be adopted and the funds released from the Cardano Treasury, key governance members, delegated representatives (DReps), and the Intersect Civics Committee (ICC) must vote.
Community Divided on $225M Plan
The proposal has ignited a heated debate within the community, with some key members openly voting against it and encouraging others to do the same. A prominent stakeholder, known as a Cardano whale, voted down the plan, raising concerns about wasteful spending and potential inflation.
He stated, “Crypto is about disinflation; Bitcoin is below 1% now, putting everyone under pressure, and Cardano is below 2%.” The whale cautioned that treasury spending would rise, risking the dilution of ADA’s value.
Moreover, he expressed concern that several initiatives should not be bundled for a single vote, suggesting that some may be outright risks or scams. “I will once again reiterate that this spending path we are on is the single biggest risk to Cardano currently,” he added.
Conversely, proponents of the proposal attempted to downplay inflation concerns. One member asserted that Charles Hoskinson believes the sell pressure will be negligible if the spending is managed responsibly over time. He emphasized, “We’ll fall behind if we don’t make some bigger bets, especially at this time.”
Source: Cardano Governance
The voting will conclude on the 14th of June. As of now, only 7% of DReps have voted ‘NO’, while 92% have yet to cast their votes. To pass, over 50% of DReps must support the motion, along with approval from constitutional committee members.
Notably, market sentiment surrounding ADA seems largely unaffected by the ongoing debates. Overall weighted sentiment has shifted positively.
Source: Santiment
On the price front, ADA’s recovery in May is nearing a breakthrough of the 2025 downtrend (descending channel). The $0.80 level, previously the peak in early 2024, is critical. If bulls reclaim this level as support, they could push prices further to $0.9 or even $1.
Source: ADA/USDT, TradingView
Conclusion
As the vote progresses and the Cardano community contemplates this $225 million budget allocation, the potential long-term impact on ADA remains to be seen. While risks associated with spending are recognized, the opportunity to drive growth through innovative projects could present a balanced future for the Cardano ecosystem.
