Cardano Reviews minUTxO Wahala for Token Transfers

Researchers Nicolas Henin, Will Gould and Polina Vinogradova submit one Cardano Problem Statement on September 11 wey dey address the friction wey the network current minUTxO implementation dey cause. The document identify seven use cases and set requirements for proposals wey dey aim to make transaction funding and construction simple. E still open for review and e no introduce any protocol change.

Why Cardano Requires Minimum Value in Transaction Outputs

Cardano dey store assets inside unspent transaction outputs wey dem dey call UTxOs. Each output fit contain the network base currency together with native tokens, including NFTs.

The minUTxO rule require say every new output must get minimum amount of the network base currency. The exact requirement depend on the serialized size of the output, including the assets, datum and any reference script.

This mechanism create economic cost to maintain persistent ledger state and e limit the creation of plenty low value outputs. The money wey follow no be transaction fee or transfer to treasury. E still be part of the output and the person wey fit spend am dey control am.

When outputs dem consume or consolidate, their value fit fund new outputs and transaction fees, as long as the outputs wey remain still meet their own minimum requirements.

Small Payments and Token Distribution Face Added Friction

CPS-0037 describe situations wey user wan send native token without sending extra ADA. For the current model, the sender must fund the minimum requirement for the new output, while the recipient go gain control of the money wey follow am.

The cost go big pass if project dey distribute tokens to many addresses. Every recipient output need im own minimum value, meaning the distributor go supply extra funds across the whole batch. Claim model fit shift the funding obligation go recipients side, but e also change the user flow and require their participation.

The document also cover small payments wey dey below the applicable minimum. Dem no fit represent am as independent outputs unless person add extra value or combine the payment with existing recipient output.

Another case involve wallet wey fit preserve one token for successor output but no get surplus to pay the transaction fee. To complete the transfer, e go need another input, one withdrawal or one external fee sponsor.

CPS-0037 Sets Requirements for Future Cardano Solutions

CPS-0037 define the problem and the conditions wey any future solution must satisfy. E no change Cardano mainnet rules, e no reduce the current minimum and e no specify deployment schedule.

Henin talk on September 14 say work wey follow BuilderFest discussions dey examine possible changes inside the Cardano ledger code. The team dey study whether application value fit separate from the funds wey dey support output and whether deposits fit balance across the entire transaction.

Any future design must still protect the ledger against too much accumulation of live outputs, preserve value conservation and keep existing outputs spendable. E must also address compatibility with deployed smart contracts wey dey check exact amounts of ADA.

The authors require say proposed solutions must dey tested with reproducible transactions wey cover funding, fees, recoverable value and application logic. Those comparisons must show whether design remove the burden, reduce am or shift am give another participant.

CPS-0037 give wallet developers, application teams and ledger engineers one shared set of cases wey future designs fit take measure themselves against. Separate proposal still go needed before Cardano fit replace the current rule, but the discussion now get defined technical requirements instead of general request to make token transfers cheap or easy.