I’ve looking at creating and collecting assets with my Algorand account. I noticed that I cannot create/own more than 1000 assets, and that for each I need to keep a minimum balance of 0.1 Algos.
To me, this solution does not seem scalable in the future. As a matter of fact if either Algo grows exponentially (as we all hope) or if I create/collect many assets, I will find myself with a lot of money freezed just in order to hold the asset on my wallet. This will obviously make it harder for me to make more transactions.
Do you know if there are future implementations working on this topic? Maybe about reducing or canceling the minimum balance at all?
Also, do you know if they are working on removing the asset limit of 1000 for every account?
The minimum balance is there to ensure that the storage of non-archival nodes (including most importantly participation nodes) does not blow up.
This is a consensus parameter so we can imagine that as storage cost decreases, it may be reduced.
(For people not familiar with it, you can see the minimum as a deposit to rent space to store assets, like deposit on lockers at the swimming pool (for a real-world analogy). It is there to prevent people to misuse the lockers in such a way that honest newcomers always have an available locker for their assets. You get the deposit back when sending out the asset, or in the case of the swimming pool, when you empty your locker.)
Note that holding an asset on Algorand costs 0.1 Algo of minimum balance. This is currently much less than $1 and this can be recovered when selling the asset.
Compare to Ethereum where every transfer of the asset requires to pay a fee much higher than $1. And contrary to a minimum balance requirement, the fee is lost forever.
Thank you very much for your answer and explanation. I have a further question. I understand that as storage cost decreases, this “deposit” may be reduced.
However, my concern is more about what happens if Algo’s value grows to, let’s say $100 dollars. In this scenario, which we all hope for, in order to keep 1000 assets on my account, I’d need to always keep $100 freezed, plus $10 on top for every further transaction, thus keeping a good portion of my capital, which I’d use for additional transactions, idle.
So, I was wondering if it’s in plan to keep the fees somehow low compared to the dollar, or if this will only be tied to a decrease in storage costs.
Thank you for your time.
How does the minimal balance required work with fractional assets? There is the documented minimal balance of 0.1 Algo to hold an asset. When an asset is created, it has a “Decimal” and “Total” parameters. For simplicity let’s create an asset that is factional by 100 (so a concept of .01 of the asset exists), then the Algo cost (i.e. minimal balance of the account to hold the asset is question) is 0.1 Algo or is it only 1/100th of 0.1 Algo if holding .01 of one of the assets? I imagine that it is the former; namely that the minimum balance is 0.1 Algo to hold, not “an asset” as the documentation states, but rather to hold “the smallest base amount of the asset”. Or am I wrong?