Cardano’s real-world asset (RWA) ambitions face a governance test as constitutional objections challenge a proposal to invest over 20 million ADA tokens in physical copper.
Dubbed the Cardano Strategic Copper Reserve, the proposal was submitted by Toto Finance and seeks to purchase copper cathodes and represent the physical metal on-chain through CuTT tokens.
How Toto Finance Plans to Build a Copper Reserve
Submitted on October 15, Toto Finance Inc.’s proposal requests a one-time withdrawal of 22 million ADA tokens from Cardano’s treasury, with the company acting as the accountable administrator.
Approximately two-thirds of the requested capital will be allocated toward acquiring high-grade copper, which will be kept in an authorized domestic warehouse. Every validated pound of this copper backing will represent one CuTT token.
Under the plan, Toto Finance would hold the copper for up to two years before conducting a controlled sale. The company would then return the net proceeds and any unused funds to the treasury within 36 months.
However, the proposal does not guarantee the recovery of the original ADA or any profit. It estimates a break-even copper price of $10.06 per pound if all stated fee ceilings apply, compared with an illustrative entry price of $6.73.
Constitutional Committee Flags Two Compliance Issues
Despite the proposal’s investment objectives, two Constitutional Committee members voted against it on October 22 and October 23, respectively. They cited two constitutional concerns.
First, the proposal’s documentation is hosted on the proposer’s website. The committee members argue that Cardano’s Constitution requires governance documents to remain immutable after submission. Although a cryptographic hash can detect changes, it cannot prevent the website operator from replacing the published document.
Second, the receiving account delegates to the “abstain” option while also delegating to a stake pool. The members consider this arrangement unconstitutional.
Additionally, one member questioned Toto Finance’s position as the sole administrator, noting that independent checks on how the company uses the funds have yet to be appointed.
The proposal needs at least two-thirds of the Constitutional Committee to find it constitutional. At the time of writing, five members had yet to vote.
DRep Voting Signals Early Resistance
Meanwhile, voting among delegated representatives (DReps) also shows limited support for the proposal.
According to the latest figures, 32.8% of DRep votes oppose the action, while only 0.32% support it. The remaining 66.87% have yet to vote.
Nevertheless, voting remains open, meaning the figures could change before the November 15, 2026, deadline.
Unfinished Arrangements Add to Implementation Risks
Beyond the constitutional objections, several aspects of the proposed investment remain conditional.
For instance, a U.S. PwC member firm is the preferred independent oversight provider, but Toto Finance has not yet engaged it. Similarly, the Cardano Foundation’s Reeve reporting layer remains a proposal, while audit mandates and security reviews for the Ethereum-to-Cardano bridge remain outstanding implementation milestones.
Under the proposed structure, the treasury-funded CuTT tranche would be locked in Ethereum escrow, with corresponding bridged tokens issued on Cardano.
Consequently, the arrangement introduces additional requirements for verifying the physical copper, securing the underlying assets, and ensuring that the on-chain tokens accurately represent the metal held in custody.
Although the proposal permits submission before the relevant contracts are finalized, it requires disclosure of their status.
Toto Finance’s CEO is scheduled to discuss the proposal with the Cardano Foundation’s governance lead during “Cardano Governance Hour #12” on October 28. Meanwhile, the governance action remains open for voting until November 15, 2026.
Cardano’s RWA Support
Notably, the proposal tests whether Cardano can pursue its RWA ambitions without compromising its constitutional safeguards. The current voting figures indicate resistance, while the outstanding compliance and implementation issues add further uncertainty.
Nevertheless, Cardano founder Charles Hoskinson has strongly advocated RWA tokenization, describing it as a major driver of growth for the crypto sector over the next five years.
The Cardano Foundation has also participated in RWA initiatives involving the London Stock Exchange Group (LSEG), MembersCap, and Archax. However, the broader push toward tokenization does not resolve the specific constitutional and operational questions facing the copper reserve proposal.