The Intersect Parameter Committee has recommended a new Parameter Update governance action combining two independent, but previously recommended, protocol parameter changes, which is now live on chain.

This article provides an overview of the proposal and its rationale to support informed participation by stake pool operators and DReps.

The Reduce minPoolCost to 75 ada and increase Plutus Memory Limits (Part 2) protocol parameter update action includes part two of the increase to maxTxExecutionUnits and maxBlockExecutionUnits (with part one having been enacted on February 18 2026), and a decrease in the minPoolCost parameter.  Intersect has submitted this governance action on behalf of the Parameter Committee, following Technical Steering Committee endorsement.

These two changes collectively aim to ease the fixed-fee burden on small stake pools and reduce friction for smart contract developers, while continuing to demonstrate that community-led parameter changes can be applied safely, predictably, and transparently.

Background

minPoolCost

minPoolCost sets the minimum fixed fee that a stake pool must charge per epoch that at least one block is validated. This fee is deducted from the pool’s rewards pot each epoch before delegators are allocated their share of the pool rewards. minPoolCost was last reduced in 2023, outlined in PCP-001, and voted on by an on-chain poll. Enacted by the genesis keys in the era before Cardano on-chain governance.

Plutus memory units

Plutus script memory unit limits define the total memory available to scripts within a transaction and a block, denoted by maxTxExecutionUnits[memory] and maxBlockExecutionUnits[memory]. They indirectly affect the total execution time for a Plutus script. The first part of a 25% increase to these limits was enacted on mainnet via a parameter update action on February 18, 2026. This new parameter update action completes part two of this planned 25% increase. This two phase approach has been required because the Cardano constitution guardrails prevent a 25% increase from being implemented in one step.

What is proposed?

Across one bundled governance action:

• Decrease minPoolCost from 170,000,000 Lovelace (170 ada) to 75,000,000 Lovelace (75 ada) (~ -55.9%)

and

• Increase maxTxExecutionUnits[memory] from 16,500,000 to 17,500,000 units (~ +6.1%)
• Increase maxBlockExecutionUnits[memory] from 72,000,000 to 77,500,000 units (~ +7.6%)

These two memory parameters complete the intended 25% increase to the per-block and per-transaction limits. Block capacity is preserved throughout: the same number of maximally sized transactions still fits into a single block at the new limits.

Why?

Two independent motivations underline this bundled action:

1. Every stake pool gets paid a flat fee (currently 170 ADA) out of its block rewards before anything is split with delegators. As Cardano's rewards shrink over time, that flat fee eats a bigger and bigger slice of a small pool's earnings, meaning that small pools become unattractive to delegators, and lose out to big pools that can absorb the fee more easily. Cutting the fee to 75 ada gives small pools breathing room again, as proposed by PCP-006 .
   
   The relief provided in 2023 has eroded as reserve-funded block rewards continue to decline, leaving the single-block pools with a ~52.8% delegator penalty, and it is projected to reach 100% by epoch 758 (February 2028) if unaddressed. As new incentives schemes are researched and developed, it may be possible to replace minPoolCost with new approaches such as a minimum margin. However, this isn’t currently possible as adding or removing parameters would require a hard fork.
2. Completing an approved plan: Plutus Memory Cost increase Part 1 delivered the maximum single-epoch increase permitted under Constitutional guardrails, short of the full 25% increase recommended by the Parameter Committee and approved by the Technical Steering Committee. This action delivers the remainder of the increase, reducing pain points for DApp developers such as the need for manual optimizations and easing contract deployment. It is anticipated that further increases will be possible in future.
   

Why now?

2026 has been a busy year already for parameter update and hard fork initiation actions on Cardano. The ecosystem has already voted on, and enacted;

• Part one of the maxTxExecutionUnits and maxBlockExecutionUnits update
• Plutus Cost Model update
• committeeMinSize update
• Hard fork initiation action (van Rossem)

Coordination has been critical to the successful implementation of these proposals. Parameter update actions belong to the category of actions that require a reference to the prevGovActionId of the same type. Now that there exists a period of low activity regarding network level governance actions, it has been deemed a safe enough window to submit this combined action. There is currently zero ambiguity regarding the prevGovActionId following the recent enactment of the committeeMinSize update and no other live parameter update actions at the time of submission.

The Parameter update governance action Reduce minPoolCost to 75 ada and increase Plutus Memory Limits (Part 2) has now been submitted on-chain and is open for voting.

Tx ID : ab474223d40e2e3540555364be27e161a809c33651408f43d84acff10c0ba306

As this action includes parameters within the Network group, ratification requires support from both DReps and stake pool operators.

The applicable thresholds are:

• 67% of active DRep voting stake; and
• 51% of active SPO voting stake.

As both SPO and DRep approval is required for this action to pass, Stake pool operators are encouraged to review the proposed changes and supporting rationale, then cast their Yes, No, or Abstain vote according to their assessment.

Considerations ahead of SecondFi-driven redelagation.

With a potential increase in redelagation activity following the recent SecondFi incident, SPOs may be able to market a wider range of fee settings to prospective delegators if minPoolCost were to be lowered to the proposed 75 ada.