Establishing a "Plan-Do-See" Governance Framework & Mandatory Revenue-Sharing for Sidechains

Governance Project Catalyst
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Establishing a “Plan-Do-See” Governance Framework & Mandatory Revenue-Sharing for Sidechains

To ensure the long-term sustainability of the Cardano ecosystem, we must transition from a “Trust-based” model to an “Accountability-based” model. I propose implementing a mandatory “Plan-Do-See” framework for all treasury-funded executing entities and codifying a revenue-sharing (buyback) mechanism for supported sidechains.

Key Proposals:

  1. Institutionalizing the “Plan-Do-See” Cycle

Currently, budget approvals (‘Plan’) and spending (‘Do’) occur without a systematic ‘See’ (evaluation/settlement) stage.

Action: No future budget request should be reviewed without a transparent, audited report of the previous budget’s expenditure and performance outcomes.

  1. Mandatory Revenue-Sharing & Buyback Mechanism for Sidechains:

For sidechains like Midnight that receive significant Cardano Treasury support:

Transparency: A full accounting of all direct Treasury capital and existing Cardano investments utilized by the project.

Bilateral Contract & Hardcoding: Establish a legally binding agreement—ideally hardcoded into smart contracts—that mandates a proportional share of the sidechain’s future profits be used to buy back ADA from the open market and return it to the Cardano Treasury.

Call to Action:
I call upon all DReps to adopt these standards as a prerequisite for any future funding. We must establish a fair, sustainable model where Cardano’s capital support is treated as an investment with equitable returns for ADA holders.

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Governance Must Follow “Plan-Do-See”: A Call for Accountability and Fair Returns

The essence of sound management is the “Plan-Do-See cycle”.

This principle applies to decentralized organizations just as much as it does to centralized ones.

Approving a budget is the ‘Plan’ stage, and executing it is the ‘Do’ stage. Crucially, a ‘See’ stage—reviewing results to inform future plans—must follow.

The ‘See’ stage begins by verifying whether actual expenditures (‘Do’) align with the approved budget (‘Plan’).

If reality deviated from the plan, those changes should have been submitted for approval mid-cycle.

Therefore, before approving new budgets, we must first transparently settle, evaluate, and disclose the results of previous spending.

If DReps are the decision-making body, they must demand this transparency from the executing agencies (IOG, Cardano Foundation, Emurgo, Intersect, Midnight Foundation, etc.), and these agencies are obligated to report their findings.

But is Cardano actually doing this? After the 70 million ADA budget was approved for these five institutions in 2025, have they provided a detailed report on the expenditure and its impact to the DReps?

As a community member, I have yet to see any DRep demand this accountability or evaluate the success of past spending before rushing to review new proposals.

This is neither scientific nor systematic—it lacks the basics of sound management.

Each executing entity must report and be evaluated on their previous performance before asking for new funding.

This should be a mandatory prerequisite for any new budget request.

Furthermore, we need an immediate corrective action regarding sidechains like “Midnight”.

We must establish a bilateral agreement—ideally implemented via hardcoded smart contracts—that mandates a comprehensive revenue-sharing mechanism.

This agreement must encompass:

  1. Total Investment Transparency

A full accounting of not only the direct Treasury capital but also all existing Cardano investments already utilized by Midnight for its development and operational costs.

  1. Binding Buyback Commitment

A binding commitment to use a proportional share of Midnight’s future profits—calculated based on the entire weight of Cardano’s capital support—to buy back ADA from the open market and return it to the Cardano Treasury.

“This must be our new standard.”

Any sidechain or project seeking future funding from the Cardano Treasury must accept this framework as a condition of investment.

We are not just correcting the past; we are establishing a sustainable, fair economic model for every future project that benefits from our ecosystem’s capital.

Transparency and equitable returns for ADA holders are not optional—they are the foundation of our future.

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Treasury Funds are for Ecosystem Growth, Not Technical or Marketing Vanity

To ensure accountability, we must implement a rigorous “Plan-Do-See” framework for every Treasury-funded project:

  1. The Plan Phase:

Every proposal must define “Expected ROI” as its core “KPI” and establish a clear “roadmap” and detailed “execution methods”, such as the choice between in-house development or outsourcing, and a defined mechanism for securing and recovering the Treasury’s equity/stake in the project.

  1. The Do Phase:

The focus here is strictly on execution according to the approved “roadmap”.

  1. The See Phase
    (Periodic & Post-Completion):

Periodic “See”
(Ongoing Oversight):
Throughout the ‘Do’ phase, regular checkpoints must verify if milestones are being met and if the project is still on track to achieve the expected ROI.

Post-Completion “See”
(Final Audit):
Within one year of completion, the actual ROI must be audited and proven. We must verify exactly how the project contributed to the ecosystem’s growth.

This accountability system must be established from the moment a proposal is initiated until its final completion.

Technical genius or brand exposure does not exempt any agency from operational accountability.

We demand professional management where value is proven by ROI, not just promised in whitepapers or event brochures.