Cardano’s $225M budget: How investors are assessing the impact on ADA?

Cardano’s $225 million budget plan has sparked community debate.
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 Cardano Treasury, key governance members, delegated representatives (DReps), and the Intersect Civics Committee (ICC) must vote.

Community divided on $225M plan

But the proposal sparked heated community debate, with some key members publicly voting against it and rallying others to do the same.

One of the renowned stakeholders, Cardano whale, voted down the plan, citing a potential risk of wasteful expenditure and elevated inflation. He argued,

“Crypto is about disinflation, Bitcoin is sub 1% now (putting everyone under pressure, 2025 is not 2020) while Cardano is sub 2%.”

Per Cardano whale, the treasury spending will increase, and the supply could dilute the token’s value.

He added that some initiatives (39) shouldn’t be bundled together for a vote to make work easier, as some may be outright ‘scams’ and ‘risky.’

“I will once again reiterate that this spending path we are on is the single biggest risk to Cardano currently.”

However, some defended the move and downplayed inflation concerns. In fact, one member said,

“Charles Hoskinson has said sell pressure should be negligible or modest if dispersed over time responsibly. He also feels we’ll fall behind if we don’t make some bigger bets, specifically at this time.”

Source: Cardano Governance

The voting will end on the 14th of June. At the time of writing, only 7% of DReps voted ‘NO’, with 92% yet to cast their vote. For the proposal to pass, over 50% of DReps must support it alongside approval by constitutional committee members.

Interestingly, market sentiment on ADA appeared unaffected by the ongoing debate. Overall weighted sentiment surged higher into the positive territory.