coindesk.com
Cardano’s community treasury is being asked to spend about $5 million on a copper reserve whose costs would leave the metal needing to rise nearly 50% just to recover the original investment under the proposal’s assumptions.
Toto Finance, a company that turns physical commodities into blockchain tokens, wants 22 million $ADA for what it calls the Cardano Strategic Copper Reserve. Voting closes Nov. 15.
About two-thirds of the money would buy exchange-grade copper stored in a COMEX-approved warehouse near New Orleans. A token called CuTT would represent each verified pound. The metal would be held for 18 to 24 months, then sold over the following year, with net proceeds and unused funds returned to the treasury by month 36.
There is no guarantee the treasury gets its original $ADA back.
The other third covers storage, insurance, audits, oversight and Toto’s work. If the full budget is spent and $ADA’s dollar price stays unchanged, copper would need to rise about 49.4% to recover the withdrawal.
The proposal assumes copper is bought at $6.73 a pound and sold at about $10.06. Lower spending would reduce that hurdle, while a stronger $ADA would raise it.
“Copper has significant upside potential, with bullish scenarios projecting approximately 30% annual appreciation. At that rate, copper would appreciate 69% over 24 months, potentially more than covering the 49.4% break-even threshold. Of course, commodity prices can also decline,” Monty Metzger, Toto’s founder and chairman, told CoinDesk in an email.
“Toto takes no profit from this proposal,” Metzger added, attributing much of the additional spending to Cardano’s constitutional requirements for oversight and auditing.
The budget allocates 2.64 million $ADA to Toto for technology and project management, plus a 441,732 $ADA execution fee. Toto could also receive up to 278,291 $ADA through a margin on third-party storage and insurance invoices, included within the operating budget. Together, those payments could reach about 3.36 million $ADA, roughly 15% of the request.
What Toto gets
Toto would retain the platform’s commercial rights and income from its separately funded CuTT business. The treasury’s financial return would come from its copper sales and unused funds.
Metzger said the company wants to scale the product to “$5 billion in tokenized copper assets” and that “Cardano could become our flagship showcase.”
The tokens would first be minted on Ethereum and locked in a bridge, software that allows matching tokens to be issued on Cardano. The contracts and their security reviews remain future work. Metzger said trackers of tokenized real-world assets have “historically focused heavily on Ethereum-based assets.”
