Eastern Cardano Council’s Further Statement on the Net Change Limit: Transitional Interpretation and the Case for Governance Infrastructure
Addressed to the Constitutional Committee and the Cardano Community - 18 March 2026
Following our post of 17 March 2026, the Eastern Cardano Council (ECC) has continued to deliberate on the constitutional questions raised by the 350 Million ADA Net Change Limit governance action (gov_action1jxne7hynfd7frcczwumd2eggps4kvy0msjztz9t0mutpy870ksgqqp6vp3p). We are publishing this further statement in the spirit of transparency and to advance what we believe is a necessary, broader conversation about the structural conditions that Cardano governance needs to function well.
A Genuine Interpretive Conflict
Since our post yesterday, a member of the ECC has raised a substantive interpretive argument that we consider important enough to publish openly, even though it creates tension with our earlier determination.
We do not think the right response to that tension is to suppress the argument or to pretend it does not exist. Constitutional reasoning at this stage of Cardano’s governance development should be transparent about difficulty, not artificially resolved in favour of a predetermined outcome.
The argument concerns the absence of transitional provisions and the inclusion of some directional guidance in both constitutions that may need consideration
Neither the previous nor the new constitution contains explicit provisions for assessing how governance actions already submitted on-chain should be treated if a new constitution is ratified and enacted while those actions remain active. Therefore, in the absence of explicit transitional provisions, this creates a degree of interpretive discretion for Constitutional Committee (CC) members when assessing such governance actions.
The absence of transitional provisions is itself a product of how the new constitution was developed. The drafting process was not grounded in a community-agreed framework established in advance, which meant that edge cases, including how to treat governance actions already active on-chain at the moment of ratification, were not systematically identified or addressed. Compounding this, community awareness of the proposed constitutional changes emerged primarily through a sequence of on-chain governance actions rather than through a coordinated off-chain process, with multiple proposals rejected by DReps before one was ultimately approved.
This sequence of events may have created uncertainty for participants seeking to submit unrelated governance actions, as they could not reasonably predict if or when a new constitution would be ratified. It therefore supports a position that governance actions submitted on-chain prior to the ratification and enactment of a new constitution, should be assessed for constitutionality against the constitution that was in force at the time of their submission.
This position is also supported by language present in both versions of the constitution. Under Appendix I, “Amending, Adding or Deprecating Guardrails,” both documents state: “In all cases, the Guardrails that apply to a governance action will be those in force at the time that the governance action is submitted on chain, regardless of any later amendments.”
While this clause refers specifically to Guardrails, it establishes a broader temporal principle: that governance actions are to be evaluated against the rules in force at the time of submission.
The 350 Million ADA NCL Info Action was submitted before the new constitution was ratified and enacted at epoch 609 in January 2026. If a temporal principle applies: that governance actions are assessed against the constitutional rules in force at the time of their submission, then the relevant framework is the previous constitution, which explicitly exempted Info actions from CC review. Under that reading, the NCL did not require CC affirmation, and it passed on DRep approval alone. It is active.
Our earlier determination reached the opposite conclusion by applying the current constitution’s requirements, including Article III Section 1.4, to the NCL action. That analysis is correct as a matter of the current constitution’s text. The question this new argument raises is whether the current constitution should have been applied to an action submitted before it was enacted on chain.
Both positions are constitutionally arguable. Neither is frivolous. The previous constitution and the current constitution reach directly opposite conclusions on Info action review, and the transition between them was not governed by any agreed framework. A gap neither document addresses and the metadata accompanying the constitutional proposal did not resolve.
The ECC does not consider it appropriate to issue a definitive determination on the 350 Million ADA NCL at this time. Reasonable CC members, applying the same constitutional texts in good faith, can reach different conclusions on whether the temporal principle applies. We will take some additional time to debate this both internally and with other CC members, prior to publishing our decision ahead of the expiry date for the Amaru treasury withdrawal, which is dependent on this decision.
What we are confident about is this: under the current constitution, going forward, Info actions are subject to CC constitutionality review. That is not in dispute as a matter of prospective application. The uncertainty is specific to the transitional period, and to the NCL action in particular.
Underwriting Governance
The situation the Cardano community now finds itself in; a genuine constitutional uncertainty affecting the treasury, unresolved because the current governance system lacks the coordination infrastructure to prevent it; points to something the Cardano community needs to confront directly.
Cardano is public digital infrastructure with ambitions at the scale of global political, social and economic systems. Its treasury is a common-pool resource, constitutionally constrained and collectively governed, intended to compound capital in service of a network whose value proposition is long-term and civilisational in scope. The human elements of the governance systems that direct the treasury are not a secondary feature. They are load-bearing pillars of its architecture.
The current situation did not arise because the people involved were acting in bad faith. It arose because the governance system was asked to perform functions (coordinated constitutional deliberation across independent actors operating under time pressure) without the infrastructure those functions require. No shared deliberative space. No coordinated transition process. No mechanism for CC members to identify, in advance, that a gap in interpretation existed and needed to be resolved before it became a live problem affecting real proposals.
The ECC’s call for improved coordination in our post yesterday was correct but understated. What is needed is not just better communication. What is needed is a recognised, resourced, and constitutionally legitimate space for governance. The work of participatory deliberation, constitutional analysis, inter-institutional coordination, and process design is a core operational cost of running a global public infrastructure network governed by its users.
This means the Cardano community needs to accept, openly and as a matter of budget principle, that governance is not a volunteer activity layered on top of the network’s real work. It is part of the real work. The treasury’s capacity to compound and deploy capital in service of the network’s long-term purpose depends entirely on the quality of the governance system directing it and working on its capital productivity. A governance system that lacks resources, coordination infrastructure, and clear process design will generate exactly the kind of uncertainty the community is experiencing now (and at greater cost as the sums involved grow).
We ask the community, the controlling DReps, and our fellow CC members to consider this as a call for proportionality. Cardano is building infrastructure for the world. The governance of that infrastructure deserves to be treated as infrastructure too.