This blog is aligned with Intersect’s public presentation on its role as administrator and incorporates information from the 2025 Treasury working group, legal guidance, and oversight committee planning. It draws on the precedent set throughout 2024 and reflects the evolving practices now used to operationalize Intersect’s role as an Administrator supporting Cardano’s on-chain funding process.

This blog begins a three-part series explaining the core mechanisms behind Cardano’s evolving treasury funding and governance infrastructure. This first part focuses on Intersect’s role as administrator. The second and third posts will explore the smart contract systems underpinning budget management and the process for vendors to receive treasury funds.

Understanding the key players involved, particularly Cardano Development Holdings, is essential.

An overview of Cardano Development Holdings

The Cardano Development Holdings (CDH) is a legal entity established to support the Cardano ecosystem by serving as the contracting counterparty for approved proposals. It provides legal clarity, addresses tax and liability considerations, and ensures agreements are accessible across jurisdictions. CDH enables Intersect to focus on its core role of facilitating decentralized governance without becoming a direct contractor while allowing for traditional arbitration when needed.

Intersect has been appointed as the sole Administrator of CDH and is authorized to act on its behalf. CDH cannot operate independently and is required to follow Intersect’s instructions, always within the scope of advancing Cardano. In practice, Intersect manages agreements, oversees delivery, and ensures transparency. CDH may provide custodial support when appropriate, including for Intersect’s budget or related ecosystem initiatives. Where possible, disbursements are handled through on-chain, escrow-based smart contracts to support auditability and community visibility.

Intersect’s role in the funding structure

As Administrator, Intersect ensures that community decisions are carried out efficiently, transparently, and in line with the Cardano Constitution. This includes legal contract creation, smart contract deployment for fund disbursement, ongoing delivery assurance, and community-enabled oversight mechanisms.

Meeting constitutional requirements

The Cardano Constitution mandates that treasury withdrawals include independent audits, on-chain oversight, and separate, auditable accounts that delegate to the auto-abstain voting option (not an SPO).

‘Budget administrators must comply with the Cardano Constitution Article IV Section 2: ‘Development of Cardano Blockchain ecosystem budgets and the administration of such budgets shall utilize, to the extent possible and beneficial, smart contracts and other blockchain-based tools to facilitate decision-making and ensure transparency.’

Intersect addresses these mandates by deploying treasury reserve and vendor smart contracts. These contracts ring-fence ada for specific community-approved projects and milestones, ensuring funds and progress are auditable on-chain. In addition, Intersect provides off-chain reporting for broader accessibility.

Treasury reserve and vendor contracts

Through the decentralized smart contract framework, we will utilize two primary types of smart contracts, Treasury Reserve Contracts and Vendor Contracts, to manage and disburse approved treasury funds transparently.

Treasury Reserve Contracts act as reserve accounts on-chain, holding ada allocated through DRep-approved treasury withdrawals. These contracts are non-custodial, auditable, and feature permissioned controls. Actions such as funding new Vendor Contracts, reorganizing UTXOs, or sweeping funds back to the treasury are possible within predefined limits. Prohibited actions include staking or participating in governance.

Treasury Reserve Contracts can be themed or partitioned to provide community observability, allowing for granular oversight and reducing risk by avoiding the centralization of funds.

Vendor Contracts are created once legal contracts between CDH and vendors are in place. They receive funding from Treasury Reserve Contracts and are designed with milestone-based disbursements. These contracts are also permissioned, allowing oversight committees to pause, resume, or modify milestones if necessary. Unclaimed or locked funds can be returned to the treasury.

Permissions for both contract types are controlled via multisignature structures, defined during the governance process. Oversight committees are granted access to these permissions, ensuring that all on-chain actions are transparent and community-auditable.

Cardano-first disbursement policy

Intersect operates under an ada-first policy, which reflects the Cardano Constitution’s emphasis on transparency, decentralization, and native asset utility. This policy ensures that payments are made in ada wherever possible, with conversion and custody decisions remaining with the vendor only when necessary and at their sole discretion.

Due diligence and contracting

Intersect performs due diligence via third-party KYC/KYB checks to verify vendors. Upon approval, Intersect creates a traditional legal contract outlining terms and deliverables and, wherever possible and available, deploys corresponding smart contracts linked to milestone disbursements. The legal and smart contracts are designed to work in tandem: one governs scope and protections, the other enforces disbursement and transparency.

Delivery assurance and oversight

Intersect’s Delivery Assurance team, supported where possible by recommendations from relevant committees, provides progress updates on funded proposals. Vendor progress can be tracked transparently through the smart contract framework and the oversight committee.

Vendors are responsible for milestone delivery and must provide publicly available evidence, ideally accompanied by attestation from a capable third party. These attestations are linked to on-chain milestones.

As a feature of the smart contract framework, an Oversight Committee (independent of Intersect) may pause or amend contracts if unmet milestones are identified. These actions are captured and auditable on-chain. 

While best practices suggest independent attestation, vendors may formally self-attest with senior accountability when external verification is impractical. This ensures transparency and a basis for future dispute resolution.

Importantly, Intersect is responsible for ensuring the process is followed, not for evaluating the quality of the deliverables. Accountability for delivery lies with vendors and ultimately, the Cardano community.

Is there anything that is not Intersect’s responsibility?

Yes. While Intersect plays an administrative and coordination role, there are specific areas where vendors are responsible. This includes verifying technical conformance, acceptance testing, formal code reviews, and security audits. In particular, any code or features intended for integration into core Haskell repositories, such as consensus, ledger, or network, must comply with the standards set out in the Cardano Engineering Handbook. These activities, when required as part of a protocol change or hard fork initiation, are the responsibility and cost of the vendor. Intersect will continue to support vendors wherever possible, but does not carry the obligation to deliver or fund these technical reviews.

In conclusion

Intersect’s role as Administrator of the Cardano Development Holdings is designed to enable community-led funding decisions to be executed with legal clarity, operational discipline, and on-chain transparency. While Intersect facilitates the process from due diligence to smart contract deployment and delivery assurance, accountability for execution rests with vendors and, ultimately, the Cardano community. By combining traditional contracting, automated disbursements, and oversight mechanisms, this framework ensures that treasury resources are used to serve Cardano’s long-term resilience and open participation.

For further details on smart contracts, governance processes, or vendor expectations, please visit our FAQ’s on our Knowledge Base or reach out to the Intersect core operations team at procurement@intersectmbo.org.