blockchain such as Algorand, Solana, and Near all have a common feature, which is that users cannot spend the entire balance of on-chain's native currency (such as $ALGO, $SOL, etc.). A portion of token will be Locked or frozen in the balance.

In this article, we'll reveal the reasoning behind the "frozen balance" design of different blockchain to better understand its impact on users.

What blockchain with this design have in common is balancing user freedom with network security. By requiring users to lock up a portion of their funds, these networks can deter spam and malicious activity, ensure efficient allocation of resources, and maintain high chain performance. However, this approach means users need to understand the requirements in order to effectively manage their account balances.

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

Near Chain has a concept of storage staking (sometimes called "rent"). Users need to pledge a certain amount of $NEAR to cover the storage space used by accounts and smart contracts on blockchain. This ensures efficient allocation of network resources and prevents malicious attacks. $NEAR pledged for storage cannot be used 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, you must hold enough SOL to pay rent. This is because Solana is designed to stay performant and efficient by incentivizing users to clean up unused accounts. The account becomes rent-free by depositing a large amount of $SOL, which effectively locks a portion of the balance to ensure the account remains active without incurring ongoing rent charges.

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 large numbers 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 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 that can be sent. If you want to use frozen portions you will need: Get staking rewards first.
Once claims that this portion of the reward will be transferred to the available balance, which can then be transferred normally.

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

👉 Basic rules:

Therefore, the "total balance" displayed in the wallet is usually greater than the "sendable" balance.

The Bitcoin Ordinals protocol means that most Bitcoin wallets currently on the market need to lock UTXOs (unspent transaction outputs). This is primarily because the ordinal protocol assigns a sequence number to each satoshi, allowing metadata to be tracked and logged onto individual satoshis.

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