Jaromir Tesaf, a Cardano community figure and prominent DRep, expressed concerns about the network’s long-term ability to raise funds and maintain security.
Recently publicationshe discussed some of the issues that could impact Cardano’s future and shared what he believes needs to happen to keep the ecosystem sustainable.
Tesaf explained that Cardano’s security will only be sustainable over the long term if transaction fees eventually take over the role currently played by reserve subsidies.
He pointed out that the reserve continues to decrease over time, which means staking rewards are gradually decreasing.
Therefore, fee income should increase significantly within the next 5-10 years. If that doesn’t happen, Cardano could face serious challenges both in terms of network security and ecosystem funding.
Cardano’s reserve level continues to fall
Commenting on these concerns, Tesaf said: cardano reserve It has already been reduced by about half compared to the early stages of the network. At the beginning of Epoch 209, reserves were ₳13.3 billion. Today, this figure has decreased to ₳6.3 billion.
He also mentioned changes in the Ministry of Finance. Specifically, the Treasury, which once reached an all-time high of £1.82 billion, now holds £1.49 billion. Given current spending rates, Tesaf estimated that the Treasury could run out of funds within about five years.
He stressed that the goal is to keep expenditures in line with Treasury revenues, but the protocol does not guarantee such an outcome. According to Tesaf, DReps can approve very large Net Change Limits (NCLs) and can also change those limits if necessary.
$ADA Fee income remains too low
Tesaf said fee income was the main driver. Cardano’s future sustainability. Currently, the network incurs an average charge of approximately ₳50,000 per epoch. That’s about ₳3.6 million or about $600,000 per year.
He pointed out that this fee income is about 1/100th of the approved NCL. He also pointed out that Cardano currently earns about the same annual fees as some development teams require to build real-world asset (RWA) platforms.
At the same time, Cardano’s funding requirements are much larger. Mr Tesaf said the network needs about ₳200 million to support the infrastructure. Based on current prices, this equates to approximately $60 million. As a result, current fee revenues cannot even cover the cost of maintaining basic protocols.
He added that reserves remain the Treasury’s main source of income. As such, the Treasury continues to play a key role in securing Cardano’s future.
Treasury needs to fund both development and expansion
Tesaf argued that the Treasury needs to support two key priorities. The first is perfecting the Cardano protocol and maintaining it over time. The second is to grow the broader ecosystem.
he emphasized that cardano Networks are never truly complete, as they constantly require research, improvement, and new features. As such, funds cannot be focused solely on maintenance, as continued development is still required.
According to Tesaf, the price is $ADA It also has a big impact on funding. He said ₳350 million will be distributed during this year’s NCL period. At the moment $ADA Even considering the price, that amount is only worth about $60 million. however, $ADA If it were trading at $1, the same allocation would be worth $350 million.
Tesaf warned: $ADAThe price of continues to fall, Input Output (IO) And other teams may have to cut staff. In such circumstances, some of the planned development may not be delivered. On the other hand, the stronger $ADA Prices can create opportunities for growth and expansion.
strategic decisions become important
Tesaf said the Ministry of Finance needs to support the growth of the ecosystem in addition to infrastructure and research. Hardening infrastructure can create long-term opportunities, but it doesn’t automatically result in users or adoption. He warned that without investments aimed directly at growth, Cardano may not be able to fully benefit from the technology it builds.
Community luminaries pointed out that history shows many examples where a better technology did not win because a competing product attracted more users. For him, the current NCL period did not allocate enough funds to grow the ecosystem.
he also said $ADAprice of played an important role in this result. The company needs a specific amount of funding, as IO will likely require a large portion of the budget. when $ADA If it trades at a lower price, it will have to use a larger portion of its NCL to meet its needs. if $ADAAs the price of increases, more funds become available for ecosystem growth.
Meanwhile, Tesaf said Cardano should focus on sustainable growth instead of waiting for future market cycles. I understand that IO wants to finalize the protocol, but I’m wondering if that should be a top priority.
he believes $ADAThe price depends not only on the quality of the protocol, but also on network effects such as user growth, partnerships, real-world use cases, liquidity, retention of existing builders, attracting new builders, and other initiatives that require investment.
Looking ahead to the next budget cycle, Tesaf called for a better approach to funding decisions. He suggested that key ecosystem participants submit estimates of the required budget before the community approves the NCL. He also recommended DRep Agree on how much money should go into key categories before approving Treasury withdrawals.
Additionally, he suggested giving proposals at least six weeks for review and evaluating them alongside other proposals in the same category. According to Tesaf, Cardano’s current funding process addresses its immediate needs and leaves considerable room for improvement.
