Skip to main content
cardano-upgrades

Cardano Upgrades

Three platform-level enhancements that expand Cardano's economic models and remove onboarding friction: account address upgrades, multi-asset treasury, and Babel Fees.

The initiative details

The team behind the initiative

The opportunity

Cardano's economic models are about to expand. A single set of coordinated initiatives unlocks new revenue models for wallet providers and DApp developers, removes onboarding friction for end users, and strengthens the protocol's long-term financial sustainability.

Account address enhancements (CIP-159) let wallets collect micro fees, reduce batcher costs, and create the account-based patterns needed for L2 reserves. A multi-asset treasury diversifies the protocol's financial reserves beyond ADA alone. And Babel Fees completes the picture by letting users pay transaction fees in any native token they already hold, bringing Cardano's invisible technology vision to life.

Together, these three enhancements are technically independent but deliver compounding benefits when combined. CIP-159 delivers the account primitives that enable multi-asset treasury design, while Babel Fees operates at the application layer on top of Nested Transactions (CIP-118). Each delivers standalone value. Together, they create new design space for the Cardano ecosystem.

The Initiative

cardano-upgrades

Cardano Upgrades

This proposal brings three complementary upgrades to Cardano's platform layer:

  • Account address enhancement (CIP-159) removes the deposit restriction on account addresses and enables direct deposits, micro-fee collection, and account balance intervals. Phase 1 targets the Dijkstra era (Q3 2026) with ADA-only support, PlutusV4 script context, and legacy Plutus mode for Nested Transactions. A future Phase 2 extends support to multi-assets, whitelisting, and dynamic deposit calculation.
  • Multi-asset Treasury (CPS-23) begins the design work that will allow the on-chain treasury to hold multiple asset types, including stablecoins, giving proposers the option to denominate budgets in stable-value currencies. This workstream produces a Cardano Improvement Proposal covering spam prevention, governance withdrawal changes, and amendments to CIP-1694. The CIP targets community ratification by Q2 2027.
  • Babel Fees enables users to pay transaction fees in any Cardano native asset, eliminating the need to hold ADA. Built on the Nested Transactions framework (CIP-118), the solution works through independent Babel Fee providers who compete to fulfil user intents at advertised exchange rates. The initial release targets two major native assets and includes Lace wallet integration. The production-ready MVP targets Q1 2027.

Treasury ask: ₳13,103,039

Who is building

This initiative is led by Michael Smolenski and Alexey Kuleshevich at Input Output Group. IO is collaborating with Ensurable Systems to deliver and sustain these platform-level enhancements, combining IO's deep protocol knowledge with Ensurable's specialist engineering capabilities.

"CIP-159 is one of those changes where you flip the switch and suddenly a whole generation of product ideas becomes viable. Micro fees sound small. The impact will be anything but."
Alexey KuleshevichInitiative Owner
"We would like to charge a small fee for an advanced wallet feature, but the minimum we can collect is around 1 ADA. Most users won't pay that for a convenience feature. This will let us charge 0.1 ADA instead, low enough that users don't think twice. This low friction means higher adoption, and higher adoption means a more sustainable revenue model that actually works for both us and our users"
Francis LuzCEO Begin Wallet

Expected outcomes

  • Account address enhancements live on mainnet (Dijkstra era), enabling direct deposits, micro-fee collection, and new wallet revenue models.
  • A ratified CIP for multi-asset treasury design, enabling the Cardano Treasury to hold diversified assets including stablecoins.
  • Transaction fees payable in any native token on Cardano via Babel Fees, with Lace wallet integration and support for two major native assets at launch.
  • New business models enabled for wallet providers, exchanges, and DApp developers who can serve users entirely within their preferred token ecosystem.

Ecosystem Impact

These upgrades collectively drive Monthly Transactions, MAU, TVL, and Revenue/Adoption. Micro fees and Babel Fees work in tandem: micro fees make lightweight actions economically viable, while Babel Fees ensures users never need to acquire ADA as a prerequisite. Together they make building and using Cardano applications seamlessly low-friction.

The multi-asset treasury strengthens Governance Participation and long-term Reliability by diversifying the protocol's financial reserves. Across the three workstreams, this is one of the broadest-impact proposals in the portfolio.

CIP-159 also enables L2 reserve patterns that benefit Midgard and other Layer 2 solutions, creating a direct link between this proposal and Cardano's L2 scaling strategy.

Governance links

Formal treasury proposal

The on-chain submission, read the full proposal text and rationale.

View the formal proposal

Join the Conversation

Ask questions, share views, and follow the community debate.

X Spaces