Title: Just an initial Idea. Please give feedback
Cardano Performance-Linked Incentive (PLI) Framework: Results-Based Treasury Rewards for Infrastructure Adoption
Summary:
This proposal introduces a new incentive framework for Project Catalyst, inspired by the proven Production Linked Incentive (PLI) model used in global industrial policy. The Cardano-PLI model incentivizes infrastructure development through post-performance rewards, eliminating upfront funding waste and aligning treasury disbursements with measurable outcomes. It is designed to attract enterprises, web3 builders, and serious developers who are willing to invest their own resources to deliver verifiable on-chain results.
This proposal outlines the incentive mechanism, risk mitigation strategies, governance structure, and enterprise benefits of this system, offering a complementary alternative to the existing Catalyst funding model.
Core Concept:
The Cardano-PLI model flips the traditional grant-first structure of Catalyst by focusing on “build-first, reward-after-success.”
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Pre-define target domains critical to Cardano’s growth:
- Hydra adoption
- Mithril infrastructure
- Layer 2 and sidechains
- Governance tooling
- DeFi and interoperability
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Builders invest their own resources to launch tools/products in these domains.
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If they meet pre-set KPIs (on-chain activity, job growth, wallet usage, etc.), they can claim rewards.
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Treasury disburses incentives only after successful outcomes are verified.
Why This Is Needed:
While Catalyst has funded many grassroots ideas, it struggles with:
- Low ROI on many proposals
- Insider dynamics that block good ideas from newcomers
- Long proposal-review-voting cycles
- High friction for enterprises
By creating a second track for results-based funding, we:
- Filter out non-performing proposals
- Reduce wasteful treasury disbursements
- Attract mission-aligned builders
- Give new teams and companies a fairer path to funding
Example Mechanism:
- A company builds a Hydra-based payment batching solution.
- It processes 50,000 tx in 3 months.
- Based on a pre-declared reward formula (e.g., 10x the tx fee volume), they apply for a reward.
- Proofs are submitted (on-chain telemetry, GitHub, etc.)
- A reviewer panel verifies the claim.
- ADA is disbursed over 6–12 months in vesting format.
KPI-Based Reward Tiers (Examples):
| KPI | Reward Formula |
|---|---|
| Total transactions processed | 10x tx fee volume in ADA |
| Unique wallets onboarded | Tiered bonuses (1k, 10k, 100k wallets) |
| Smart contract usage | Per interaction or block processed |
| Payroll jobs created (3+ months) | Flat reward per job (e.g., 500 ADA) |
| TVL for DeFi apps | Percentage reward based on total value |
| Cross-chain bridges | Reward for volume, uptime, and usage |
Eligibility Criteria:
To prevent abuse, only serious and new projects qualify.
| Requirement | Description |
|---|---|
| Project Newness | Must not be live on mainnet >30 days before registration |
| No Token Launch (TGE) | Must commit to no token event for at least 3 years |
| Cardano-Native Build | Must utilize Cardano infra: Plutus, Hydra, Mithril, etc. |
| Self-funded MVP | Must build initial MVP without treasury support |
| Transparent Metrics | On-chain or auditable usage data must be shared |
Qualification & Verification Governance:
To ensure fairness, transparency, and decentralization, the following process is proposed:
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Registration: Project must publicly register intent before launch (timestamped on-chain).
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Verification Panel: Rotating panel of:
- DReps with active voting history
- SPOs producing >X blocks/month
- Constitution Committee members
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Evidence Review: Reviewers analyze:
- On-chain metrics
- GitHub/commit activity
- Wallet usage and telemetry
- Optional: payroll attestations, signed statements
Reviewer Incentives:
- Fixed ADA rewards per verified claim reviewed
- Bonus for accurate and non-contested reviews
Fraud Mitigation & Risk Controls:
- Claims with falsified data lead to project blacklisting
- Vesting payout system to avoid front-running KPIs
- Public challenge period post-approval
- Optional on-chain staking by applicant (bonded to discourage fraud)
Benefits to Enterprises:
This model is significantly more aligned with business needs than Catalyst:
| Problem in Catalyst | PLI Model Solution |
|---|---|
| Long grant process (3–6 months) | Apply any time based on achieved results |
| Requires insider connections | Merit-based, no social capital needed |
| Unclear ROI on funding | Funding tied directly to performance |
| Risk of rejection after work | Only submit once success is already achieved |
| Misalignment with business cycles | Incentives unlocked post-performance, no proposal drag |
Message to Businesses:
“If you build impactful infrastructure on Cardano, and it works, we’ll pay you for it. No politics. No paperwork. Just production.”
Pilot Proposal Path:
- Propose a pilot fund within Catalyst or via Intersect for Cardano-PLI (e.g. 500k–1M ADA)
- Launch a public dashboard with pre-defined domains and KPI formulas
- Open a test round for the first 5–10 projects to prove model efficiency
- Use learnings to scale and iterate
Conclusion:
The Cardano-PLI framework offers a bold yet practical alternative to traditional grant-based funding. It combines decentralization with accountability, empowers real builders, and welcomes enterprises into the ecosystem. By shifting from charity to challenge — and from promises to production — we can build Cardano’s next phase of growth on outcomes, not influence.
Let builders build. Let results speak. Let treasury reward what works.