At a glance
- IO’s Cardano upgrades proposal targets three ecosystem demands in one plan: more competitive DeFi pricing, enabling a stablecoin-backed treasury to reduce funding volatility, and non-ada native asset holders transacting without needing ADA.
- Wallets and any Cardano DeFi application can charge micro-fees, the treasury gains a path to hold stable-value assets alongside ada, and users can pay transaction fees in any native asset they already hold.
- To deliver this, we are asking DReps to approve ₳13,103,039 for three Cardano capabilities: enhanced account addresses (CIP-159 multi-asset micro fees), a multi-asset treasury CIP (CPS-23), and Babel Fees.
- Delivery runs Q3 2026 to Q2 2027, with funds released only against accepted milestones through Intersect's treasury reserve smart contract and third-party assurance at every sign-off.
- If the community votes to fund this initiative, IO will be leading and delivering, working with Ensurable Systems as a chosen collaborator.
- DReps are being asked to vote yes by 24th May.
Cardano is ready for three new capabilities
Cardano is live, secure, and running on strong foundations. Nearly a million transactions are confirmed every month. Stake is broadly distributed across independent pool operators. Hard forks land on time. The governance framework adopted under CIP-1694 is regularly used by elected representatives. This is a chain with momentum.
With that base in place, there are specific capabilities the ecosystem is ready to add next. Wallets and decentralized finance (DeFi) builders want to price products competitively. The community has asked for a treasury that can hold stable-value assets, so that funding is less exposed to short-term price movements. Holders of major non-ada native assets would like to use Cardano without an ada detour. The Cardano upgrades proposal addresses these three capabilities in one coordinated plan.
What ships, when, and how it is gated
Three workstreams run in parallel, each with its own budget line and milestone plan.
Enhanced account addresses (CIP-159 multi-asset micro fees) deliver Phase 1 in the Dijkstra era hard fork in Q3 2026: direct ada deposits into account addresses, arbitrary withdrawals, account balance intervals, PlutusV4 script context upgraded so Phase 2 fields are ready, and legacy Plutus mode for nested transactions. In Q4 2026, the proposal funds Phase 2 preparation: Euler era definition and propagation across Cardano node components, introduction of whitelisting certificates to account state, a new ledger state query for account retrieval, and LedgerHD Step 2. Full Phase 2 multi-asset delivery is specified in the CIP for a future release.
Multi-asset treasury (CPS-23) is a CIP design workstream culminating in broader community consultation in Q1 2027, followed by the CPS-23 CIP and CIP-1694 amendments submitted for merge by Q2 2027.
Babel Fees ships the MVP in Q1 2027, with a production-ready target of February 2027, integrated with the Lace wallet. The MVP supports at least two major native assets, selected by the project team at build time; BTC and USDC are cited in the proposal as illustrative examples. Babel Fees operates at the application layer on top of the CIP-118 nested transactions ledger primitive. Testnet validation of CIP-118 is a precondition for the Babel Fees service milestone, and we name the dependency openly in the proposal's risk register.
What Cardano looks like after delivery
Picture the chain in late 2027. A Cardano DeFi application, a wallet, a DEX, a lending protocol, a payment app, any of them, can price a micro-fee at the account layer because the minUTxOValue floor that held fees above about one ada no longer applies. Builders that choose to adopt this capability can compete on price, and cheaper products flow through to end users. Wallets can build a viable micro-fee business model into their product, earning sustainable revenue that is tied directly to the value they give users.
The Treasury, with CPS-23 in hand, has a designed path to hold stable-value assets alongside ada. Funding decisions can be insulated from short-term price movement, which matters to every proposer planning a multi-quarter delivery. Ada remains Cardano's native protocol asset; the treasury gains the option to hold assets beyond it.
A user arriving on Cardano with Bitcoin, a stablecoin, or another major native asset can use the chain without ever acquiring ada. Transaction fees are paid in the asset they already hold. For that user, Babel Fees delivers a pure native-asset experience end to end.
Together, these three contribute directly to three of Cardano's core 2030 KPIs: monthly transactions, monthly active users, and annual protocol revenue. They anchor in Pillar 2 (adoption and utility) and Pillar 5 (ecosystem sustainability and resilience, focus area E.1 financial stewardship and tokenomics). Each workstream delivers measurable capability that ada holders, builders, and everyday users can see and use.
This is continuity in delivery. Expansion in capability.
The team
For delivery, we are working alongside Ensurable Systems, a chosen collaborator whose specialist capability across ledger, Plutus integration, conformance testing, and service-layer engineering complements our protocol knowledge. Ensurable Systems is a collaborator we chose for its alignment with Cardano's goals. Broadening the base of teams capable of building and maintaining Cardano's core infrastructure aligns with the Cardano 2030 direction and is how the ecosystem becomes more resilient over time.
What DReps are being asked to do
Approve ₳13,103,039 across three workstreams, disbursed only against accepted milestones, with unspent funds returned to the Cardano treasury.
Vote on Govtools. The full proposal, budget breakdown, and milestone schedule are available there.
For even more information, listen to this X Space on Cardano utility proposals.
