Understanding Cardano’s Net Change Limit
The Cardano Foundation published an article explaining the Net Change Limit (NCL), a constitutional parameter within Cardano's governance framework. The NCL defines the maximum amount of ada that can be withdrawn from the treasury over a specific period, typically annually. This mechanism serves as a crucial safeguard for fiscal responsibility and long-term treasury sustainability, balancing ecosystem funding needs with monetary stability. Ratification of the NCL via DRep vote is a required step before budget proposals and treasury withdrawals can proceed.
