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    "comment": "Coin Ceylon DRep Rationale for Voting NO on the Treasury Tax Reduction Proposal (20% → 10%)\n-\nAt Coin Ceylon, our role as a DRep is to ensure that governance decisions support long-term sustainability, decentralization, and the growth of the Cardano ecosystem. After careful consideration of the proposal to reduce the Treasury tax rate from 20% to 10%, we have decided to vote NO based on the following critical factors:\n\n1. Ensuring Long-Term Ecosystem Sustainability\nThe blockchain industry remains dynamic and evolving, with significant work still needed in infrastructure, research, and governance. Innovations, emerging market opportunities, and strategic partnerships are continuously reshaping the landscape. For Cardano to thrive, it must seize these opportunities while ensuring that its systems remain efficient and robust. Cutting the treasury tax to 10% at this stage risks limiting the funding necessary for these crucial efforts, potentially slowing development and innovation just when competition is intensifying. A robust treasury is essential for Cardano to pursue new opportunities, strengthen its ecosystem, and maintain a competitive edge in a rapidly advancing industry.\n\n2. Staking Incentives Should Be Addressed Through Adoption, Not Treasury Cuts\nWhile increasing staking rewards is an important goal, simply boosting them by reducing the treasury tax is only a temporary fix that does not resolve the underlying issue of low transaction volumes. If transaction fees remain low, staking rewards will continue to diminish over time—regardless of any tax adjustments. Instead, our focus should be on driving adoption, enhancing scalability, and increasing transaction volumes. A stronger, more widely adopted network will naturally result in higher staking rewards without compromising the essential funding needed for ongoing development.\n\n3. Treasury Funding is Essential for the Upcoming Cardano Ecosystem Budget\nAs we prepare to submit the first-ever Cardano Ecosystem Budget—supported by a net change limit of 350M ADA—it is crucial to ensure that the treasury remains well-funded. Reducing the treasury tax now would negatively affect the net replenishment rate, thereby reducing the funds available for critical budget withdrawals. With 2025 poised to be a pivotal year for blockchain and cryptocurrency adoption, Cardano must remain competitive through increased exposure, adoption, and ecosystem expansion. This requires substantial funding for marketing, education, partnerships, and technological advancements. An immediate tax cut risks undermining Cardano’s capacity to make these essential investments at a critical time.\n\n\n\n4. Treasury Reserves and the Impact of a Rapid Tax Cut\nTreasury funds are allocated strategically and transparently to support Catalyst, governance initiatives, and long-term ecosystem stability. Importantly, unclaimed staking rewards—returned to the reserve—effectively increase the actual treasury accumulation rate beyond the nominal 20%. Dropping the treasury tax abruptly to 10% could therefore have a more significant impact than it appears on the surface, introducing unnecessary risk by potentially underfunding future development. Maintaining a robust treasury is crucial to support decentralized decision-making and innovation, particularly as Cardano transitions into the Voltaire era.\n\n5. A More Strategic Approach is Needed\nRather than an immediate reduction to 10%, a phased or conditional approach would be a more responsible alternative. For instance, a gradual step-down—from 20% to around 17% or 15%—would allow the ecosystem to assess the impact without disrupting treasury funding. Additionally, implementing a dynamic treasury tax model that adjusts based on transaction volume, treasury reserves, and governance funding needs could provide a better long-term solution. Cardano’s governance should prioritize strategic, data-driven economic adjustments that reflect current market conditions and network growth.\n\nConclusion\nAt Coin Ceylon, we remain committed to ensuring Cardano’s long-term success. While we recognize the importance of boosting staking incentives, we believe that maintaining a well-funded treasury is critical for sustaining innovation, governance, and ecosystem development. With the impending launch of the Cardano Ecosystem Budget and 2025 marking a crucial period for blockchain adoption, preserving treasury funding is essential to support critical investments in exposure and growth. For these reasons, we are voting NO on this proposal at this time.\nWe encourage continued dialogue on sustainable treasury management and remain dedicated to supporting thoughtful, evidence-based economic governance for the Cardano ecosystem.\n-\n\nFor more in-depth information on our voting rationales you can visit our DRep page at - www.CoinCeylon.com/Drep\n"
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