Blockchains such as Algorand, Solana, and Near share a characteristic where users cannot spend the entire balance of the chain's native currency (e.g., $ALGO, $SOL, etc.). A portion of the coins will be locked or frozen within the balance.

In this article, we will reveal the reasons behind the "frozen balance" design of different blockchains to better understand its impact on users.

The common thread among these blockchains with this design is to balance user freedom with network security. By requiring users to lock a portion of their funds, these networks can deter spam and malicious activity, ensure the efficient allocation of resources, and maintain high chain performance. However, this approach means users need to be aware of these requirements to effectively manage their account balances.

On the Algorand chain, accounts must maintain a minimum balance to exist on the blockchain. This requirement is in place to prevent malicious attacks and ensure the network remains efficient. The minimum balance is calculated based on the size of the account, which increases as the number of Algorand Standard Assets (ASA) or smart contracts the account selects or creates increases. This means a portion of the balance is always "locked" to satisfy this requirement.

The Near chain has a concept of storage staking (sometimes referred to as "rent"). Users need to stake a certain amount of $NEAR to cover the storage space used by their accounts and smart contracts on the blockchain. This ensures the efficient allocation of network resources and prevents malicious attacks. The $NEAR staked for storage cannot be spent unless the data occupying the space or the account itself is deleted.

Solana introduces a novel concept called "rent." To maintain an account on Solana, it must hold enough $SOL to cover rent fees. This is because Solana aims to maintain high performance and an effective state by incentivizing users to clean up unused accounts. Accounts can become rent-exempt by depositing a larger amount of $SOL, which essentially locks a portion of the balance to ensure the account remains active without incurring ongoing rent fees.

The XRP Ledger requires a minimum reserve to create and maintain an account. This reserve requirement is intended to deter malicious attacks and activities by increasing the cost of creating a large number of accounts or transactions. The minimum reserve can change based on network governance decisions, but it acts as a "locked" balance that users cannot spend unless they delete their account (which is not a common practice).

When you stake on the Cardano (ADA) network, your assets are divided into two parts:

Therefore, the "Total Balance" displayed in the wallet will be greater than the actual amount available to send. If you want to use the frozen portion, you need to: Claim the staking rewards first.
Once claimed, this portion of rewards will move into the available balance and can then be transferred normally.

In the Stellar network, an account must retain a portion of XLM as a minimum balance, so the entire balance cannot be transferred out.

👉 Basic rule:

Therefore, the "Total Balance" displayed in the wallet is usually greater than the "Available to Send" balance.

The Bitcoin Ordinals protocol means that most Bitcoin wallets on the market currently need to lock UTXOs (Unspent Transaction Outputs). This is primarily because the Ordinals protocol assigns a sequential number to each satoshi, allowing for the tracking and inscription of metadata onto individual satoshis.

The frozen balance mechanism on the Dynex chain is designed to protect the network and its users by ensuring transaction integrity, enhancing security, and complying with regulatory requirements.