Cardano DReps Face May 24 Deadline on ₳13M IOG Upgrade Proposal Covering Fees, Treasury, and Token Payments
Input Output Global (IOG) is asking Cardano's elected governance delegates to approve ₳13,103,039 from the on-chain treasury to fund three protocol upgrades by May 24, 2026. The package covers micro-fee infrastructure, a multi-asset treasury design, and a long-awaited feature that lets users pay transaction fees in tokens other than ADA.
The proposal, which IOG calls the "Cardano Upgrades Proposal," bundles three distinct workstreams into a single on-chain vote under Cardano's Voltaire governance framework. Passing requires a 67% supermajority of active delegated representative (DRep) stake plus approval from five of seven Constitutional Committee members. Approximately 1,000 elected DReps make up the electorate being asked to vote. Under current rules, any DRep who does not cast a vote is counted as a No, meaning abstentions carry the same weight as opposition.
What the Three Workstreams Actually Do
The first workstream, CIP-159, addresses a structural fee floor baked into Cardano's ledger. Because of the way the network calculates storage costs, the minimum economically viable transaction fee today sits around 1 ADA, even though the average fee is only 0.39 ADA. CIP-159 introduces enhanced account addresses that accept direct deposits and support flexible withdrawal rules. The practical result is a fee floor closer to 0.1 ADA, opening up micro-transaction revenue models for wallets, DeFi batchers, and Layer 2 operators. IOG's delivery plan targets Phase 1 for a Dijkstra era hard fork in Q3 2026, though Cardano Forum community threads tracking the Dijkstra shortlist peg that era at Q1 to Q2 2027. The discrepancy suggests IOG may be targeting an earlier intra-era upgrade; no public clarification from either IOG or Intersect appears in available sources on the timeline difference.
The second workstream, CPS-23, is a research and design effort to let Cardano's on-chain treasury hold stablecoins and other stable-value assets alongside ADA. Right now, the treasury holds only ADA, which means its dollar-denominated purchasing power shrinks during bear markets at precisely the moment funding matters most. Cardano founder Charles Hoskinson has separately described, in remarks reported by CoinEdition, a broader vision of converting 5 to 10 percent of the roughly 1.2 billion dollar treasury into a diversified portfolio including USDM, USDA, IUSD, and Bitcoin. The 2026 allocation covers research and initial CIP drafting rather than live deployment. DRep Jaromir Tesar of Cardano YOD₳ described the workstream as "theoretical rather than implementation-ready code" in comments via CaptainAltcoin this month.
The third workstream, Babel Fees, enables users to pay transaction costs in any native token they already hold, without first acquiring ADA. The mechanism works through Cardano's eUTxO model: a user submits a transaction that declares a fee liability in ADA, denominated in their chosen token, and stake pool operators (SPOs) act as liquidity providers by covering that liability and accepting the tokens at market rates. SPOs are therefore incentivized to accept tokens they want to accumulate, creating a fee marketplace. The 2026 Babel Fees implementation builds on CIP-118 (Nested Transactions), which is also on the Dijkstra shortlist; if CIP-118 is not included in the hard fork, Babel Fees cannot ship as designed. Tesar, who said he intends to vote Yes despite reservations, noted that "the first version depends on a single provider," calling it workable as an initial step provided stakeholders understand its limitations.
IOG's article framed the combined need plainly: "Wallets and decentralized finance 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."
Why This Matters Outside the US
The upgrades carry outsized relevance in Sub-Saharan Africa and South Asia, among Cardano's fastest-growing regions. Stablecoins account for 43% of digital asset transactions in Sub-Saharan Africa, according to Cardano Foundation data cited by BitcoinKE. Nigeria and Kenya together represent 9.4% of all Cardano wallet activity. For users in those markets, Babel Fees removes a concrete friction point: today, anyone who holds USDT or a local stablecoin but no ADA cannot interact with the Cardano network at all without first buying ADA specifically for fees.
The micro-fee floor from CIP-159 is similarly practical for mobile-first builders in the region. At 1 ADA per minimum transaction, subscription models and micro-payment features are economically unviable. At 0.1 ADA or below, wallet providers serving lower-income users gain a commercially sustainable pricing range. Projects already deploying on this infrastructure illustrate what that range unlocks: Landano uses Cardano for land rights registration in Mozambique, while DigiFarm applies it to agricultural tools for smallholder farmers in Kenya. The Cardano Foundation's 30 million dollar Africa-focused developer grants program, approved earlier in 2026, received 180 applications from 14 countries in its first week alone, indicating a builder community that will land directly on this infrastructure.
South Asia posted the largest regional user growth on Cardano in 2025, with India and Pakistan recording a 40% year-over-year increase. Users there predominantly hold stablecoins and project tokens rather than ADA as a primary asset, making Babel Fees a structural accessibility fix rather than a convenience feature.
Payment Structure and What Comes Next
Funds will be held in a smart contract developed with Sundae Labs and released only upon verified milestone completion. Sundae Labs also appears among the external community reviewers listed for this proposal; that dual role as both co-developer and reviewer is worth noting as governance participants evaluate the oversight structure. Multi-signature authorization requires both Intersect and an independent Oversight Committee. Ensurable Systems will provide third-party assurance at each milestone sign-off under this proposal specifically. Intersect's governance documentation is direct on the consequence of failure: "If a milestone isn't met, funds can be paused or returned."
The vote closes May 24. This proposal is one of 39 treasury actions currently before DReps across all submitters in the 2026 budget cycle, and one of nine IOG proposals this year. IOG's total 2026 ask of approximately 38.9 million dollars is down sharply from 97.5 million dollars in 2025, a reduction the organization has linked to community feedback on spending scale. Delivery across all three workstreams is scheduled to run from Q3 2026 through Q2 2027.