Liqwid DAO Core Development Team Operating Budget | 2025–2026 Salary Plan

Liqwid DAO Core Development Team Operating Budget | 2025–2026 Salary Plan

Summary

This proposal seeks DAO approval for an updated 12-month Core Team developer salary budget totaling $1,610,000, reduced from $2,700,000 in the previous cycle — a 40.4% decrease in cost. This reduction aligns with the DAO’s strategic move towards sustainable financing of DAO operating expenses.

The budget supports developers responsible for maintaining the existing Liqwid v2 protocol and building new revenue-generating products such as:

  • Bitcoin DeFi Aggregator
  • Real World Asset (RWA) Markets
  • Liqwid V3

The most accurate detailing of all new products can be found in the Liqwid Cardano Treasury proposal here: https://gov.tools/budget_discussion/621

Although Liqwid DAO Core Team’s Cardano treasury budget proposal was unsuccessful, the plan to build and launch the products outlined above remains. The Liqwid roadmap and proposed product development plan outlined in our budget proposal is also fully aligned with the 2025 Cardano Product Roadmap with Liqwid products aimed more directly at new user acquisition growth, increased stablecoin liquidity and improvements to decentralized infrastructure used to power the Liqwid protocol.

Description

Scope

This proposal focuses solely on Core Team salary expenses, which are the largest part of the DAO’s annual operating costs. Other costs, such as infrastructure and security audits (e.g., $300,000 in last year’s budget), will be addressed in separate proposals.

Rationale

With the growth in DAO revenues and the completion of most roadmap items from the 2024–2025 cycle, the Liqwid DAO is positioned to move closer to financial sustainability, where operating expenses are covered by DAO income alone.

The DAO’s largest annual expenses include:

  • Core Team salaries (Liqwid Labs), covered by this proposal.
  • Protocol infrastructure (e.g., oracles, offchain servers), not covered by this proposal and will be addressed separately.
  • Smart contract audit costs, not covered by this proposal and will be addressed separately.

While current DAO revenues are not yet sufficient to achieve full self-financing, we anticipate a continued trend of meaningful acceleration to revenue growth in the coming months as the 1st half of 2025 data has shown. Increased protocol utility driven by new product launches and growing user adoption is expected to increase the total revenue generated within Liqwid DAO. This revenue growth may also position Liqwid DAO for a more favorable external financing environment. In addition this revenue growth results in a positive feedback loop for LQ as higher revenues from new product launches results in larger monthly LQ buyback volumes & a higher LQ valuation.

As the most utilized lend-borrow protocol on Cardano since launch and the only one that generates both yield and staking rewards for ADA deposits locked as collateral in loans, Liqwid is clearly positioned as a leveraged investment on the growth of the entire Cardano DeFi ecosystem. With the launch of various Cardano-Bitcoin bridges and incoming stablecoin liquidity the Cardano DeFi ecosystem is strongly positioned for asymmetric upside growth and Liqwid is well-positioned to capture growth alongside it. As we build towards this end-state future the strategic financing from the Liqwid DAO will serve as a bridge for the DAO Core Team’s salary expense until external funding can be secured.

Budget Financing Plan

The $1,610,000 developer budget will be funded through limited monthly borrowing, capped at $134,167 per month. Our strategic priority is to minimize new DAO POL loan origination by covering Core Team salary expenses with funds sourced from:

  • Liqwid DAO revenues (10% interest income accruing to the Liqwid DAO treasury)
  • Catalyst grant funding (when possible)

Important notes regarding this proposal:

  • No changes are proposed to the 80% of interest income allocated to lenders nor to the 10% of interest income allocated to LQ Stakers.
  • The only proposed change is to the Liqwid DAO’s 10% interest income. Currently the 10% income split for Liqwid DAO treasury used for LQ buybacks, if the proposal passes, will be redirected to support Core Team salary expenses and gradually repay POL loan interest.
  • No new LQ collateral will be added to the POL loan position. The existing LQ allocation remains unchanged.

Additional Proposed Measures Toward Liqwid DAO’s Fiscal Sustainability

A) Redirect Liqwid DAO Treasury Interest Income to Core Team Salary Costs

This proposal recommends reallocating 100% of the Liqwid DAO treasury interest income funded through its 10% share of the protocol’s interest margin—to cover Core Team salaries. This 10% income margin split is presently used for the LQ Buyback Program which are purchased on Cardano DEXs and held in the treasury reserve wallet.

The objective of this reallocation is to minimize new borrowing and move the DAO closer to fully covering all operating expenses through its own revenue. For example, if the DAO generates $50,000 in revenue during a given month, the new borrowing requirement would be reduced from $134,167 to $84,167, significantly lowering the reliance on additional debt.

While it is difficult to produce accurate revenue forecasts due to ongoing market volatility and global economic uncertainty, the Core Team anticipates a significant increase in total value locked (TVL) over the next year. This growth is expected to stem from new Liqwid DAO product launches aimed at broader user acquisition, a more favorable macro environment for crypto assets, and a shifting U.S. regulatory landscape that is increasingly supportive of decentralized Layer 1s and DeFi protocols.

Liqwid’s TVL growth will likely reflect all of these factors, but especially the launch of RWA Markets, the Bitcoin DeFi Portal, and Liqwid V3. Taken together, these initiatives should significantly expand the user base, increase borrowing volumes, and grow protocol revenue.

B) Rebalance DAO Debt tokens

We propose to shift the debt from higher-interest to lower-interest stablecoin markets. The outcome will be a reduced POL loan interest expense, contributing to the DAO’s fiscal sustainability goals.

C) Increase POL Market Max LTV

  • Raise maxLTV from 70% to 80.89% (equal to ADA market).
  • Purpose: Maintain a health factor of 3 or higher throughout the 12-month period, enhancing safety. See the Health Factor simulation here.

Proposal Actions

  1. Approve the 2025-26 Core Development Team Budget and the maximal amount to withdraw per month for covering Core Team salary costs.
  2. Redirect the Liqwid DAO’s 10% treasury allocation from the LQ Buyback Program to Core Team salary costs.
  3. Rebalance existing debt positions to reduce interest payments.
  4. Increase the maxLTV for the POL market to 80.89% to improve position health and buffer.

Technical Considerations

There are no technical considerations or smart contract changes required for the execution of these proposed actions.

Conclusion

The Liqwid DAO Core Team recommends adopting this proposal to finance the next 12 months, while operating the POL position with an adequate health factor.

By supporting this proposal, the DAO continues funding essential product development work while protecting its long-term economic health.


Do you support the proposed changes in this proposal?

  • Yes, I support this proposal.
  • No, I do not support this proposa.
0 voters
7 Likes

Dear LQ holders,

I am writing in a personal capacity following the publication of the governance proposal concerning the Liqwid Core Team loan. In that proposal we laid out a conservative base case, but please know we are simultaneously planning for a more optimistic growth path should market and regulatory conditions continue to improve.

Over the past 4½ years, crypto’s volatility has reminded us to stay prudent, yet it has also reinforced our conviction in Liqwid’s long‑term opportunity. We see real reasons for optimism.

Cardano’s Perception & Institutional Interest

Since launching the crypto strategic reserve, we have observed a noticeable shift in how media outlets and institutional investors talk about Cardano. ADA is increasingly treated as a credible, institution‑grade asset. In parallel, the U.S. House’s recent passage of the Clarity Act (yesterday) is an encouraging signal for the industry’s regulatory trajectory. While the bill still has more steps before becoming law, the direction is clear: assets that meet commodity‑like criteria may see a more workable compliance path than those classed as securities. We believe this tilt is structurally positive for Cardano.

Institutional DeFi: Where We are Headed

Capital is likely to keep flowing toward public blockchains, especially as traditional finance (TradFi) products become tokenized and integrated with DeFi applications. Liqwid is well positioned: our composable architecture supports multiple isolated markets while allowing granular risk segmentation. We can size total exposure via supply and borrow caps, tune risk parameters at the collateral level, define permissible debt/collateral pairings, and list additional collateral types or adjust positions dynamically. This level of configurability matters to institutions performing robust risk management.

Put simply, we have built a high‑performance platform—but today we’re still cruising at only ~60 km/h. There’s far more headroom.

Upcoming Opportunities

Bitcoin‑native DeFi is emerging, and we intend for Liqwid to capture meaningful share of the associated lending flows. Our technical team has been building together for ~18 months, and under Dewayne’s leadership and mine we have an ambitious roadmap we are eager to execute.

Crypto as an industry is on the brink of broad adoption. Liqwid is positioned to participate—and help lead—this next phase.

Thank you for your trust, support, and engagement in governance. I encourage you to vote YES on the Liqwid Core Team loan proposal. Together, we’ll reach new heights.

7 Likes

I vote YES to this proposal. Thanks for your efforts and the team that is sometimes silent behind the scenes, developing. The protocol is awesome and has come a long way since the first V1 launch. It is well-positioned to capture market when institutions decide it is time to use the protocol. Next up, RWAs!

4 Likes

I would like to praise the Liqwid team for writing this realistic proposal to move forward. I can especially appreciate the personal touch made by Florian putting things in perspective. Recently I have seen a lot more constructive communication from the Liqwid team, which makes me hopeful they will be able to deliver on their ambitious roadmap. You guys have my full support, so I will vote YES, let’s make it happen!

3 Likes

I support this. Liqwid labs has done an excellent job leading Cardano defi innovation and growing the Liqwid platform.

2 Likes

I voted yes. Great to see more reduction in the budget, although protocol infrastructure and smart contract audit costs are yet to be included.
Given a more and more promising market activity for 2H 2025 and 1H 2026; hopefully we’ll come to a point where 100% of the budget comes from Liqwid DAO revenues. Only then will the protocol become truly sustainable. I believe we are on the right path to achieve this.

2 Likes

hello Florian
i agree that the team deserves a decent salary :slight_smile:

but what is a decent salary?
especially in crypto we often see job offers with salaries up to 5 numbers, even more for executive positions
here you are mentionning a monthly amount of $134.167 to be split and shared with all the core team, is this correct?
is it correct also (referring to the team tab on liqwid website) that the core team is composed of 12 dudes (and one dudesse off course, hi, Emily :slight_smile: )

if i am not wrong, this middle school level computation gives us an average of $11k per employee every month, right?

please take a minute to explain where I am wrong so I maybe better understand this proposal. I like to understand proposals to a certain point even if I am very often sure these are good things for the future of Liqwid, most of time the technical level is above my skills and knowledge :cry:
also what happenezd to liqwidpro, was is rebranded or delayed or else?

Regards and intergalactic love from Nibiru (France, lets be realistic)

post scriptums: i must precise this time; i broke one on my main armbone and i am under quite heavy medication pain killers drugs so, i am a little bit diminished these days-yes , even more than usual, so sorry if my question looks silly or bad worded. breaking bone right before the hollidays, i take it with philosophy .
cheers

2 Likes