Following an extended governance vote marked by concerns over transparency, accountability, and expenditure, Input Output Global (IOG), Cardano's core development team, has secured approval for a $71 million treasury allocation to support 12 months of network upgrades. The proposal garnered 74% of the vote, authorizing the disbursement of 96 million ADA, equivalent to approximately 13% of the protocol's treasury, to IOG. Payments will be tied to milestones and overseen by Intersect, a governance body driven by its members. Additional oversight will be provided by smart contracts and an independent committee, as stated by IOG.
Key objectives include the development of Hydra, a layer-2 scaling solution designed to facilitate faster and more affordable transactions, as well as Project Acropolis, which aims to re-design the Cardano node for enhanced modularity and simplified developer onboarding. The team also intends to reduce memory usage and optimize operational costs for validators. These implementations are anticipated to eventually lead to increased developer activity and the emergence of new use cases on the Cardano network, contributing to heightened demand for ADA, the network's native cryptocurrency.
The proposal, which has been under discussion since the beginning of the year, encountered opposition from some quarters, with critics arguing that it lacked detailed breakdowns and questioning whether it should have been split into smaller, individually voted items. A rival proposal submitted by Cardano's Technical Steering Committee was ultimately rejected, despite initial support.
Meanwhile, rival blockchain networks are also pushing forward with their own upgrades, such as Solana's recent 20% increase in its compute unit ceiling and Ethereum's Pectra upgrade, which lifted its blob limit and staking caps, while another significant fork, Fusaka, is slated for late 2025.