What happens to ada bound to non burnable tokens?

When minting tokens you will need a specific amount of ada to go with them, in my case of minting 50 unique ones in one utxo that was around 10 ada.
If I understood it correctly that means that if the policy expires these 10 ada are forever bound to the tokens minted, they can not be separated from the utxo with the tokens or burned.

What happens if I need to use these ada for payment? Will they be accepted as any normal payment even though they are connected with unwanted tokens, or will there be a lot of garbage NFTs that is blocking people from using the ada that is residing in the same utxo?

I thought I would always be able to burn tokens in my own address to get the ada in the utxo, but it seems from the documentation that is not the case. Anyone has more thoughts or information on this? :slight_smile:

Yes, the unburnable tokens will always be bound to some ada, but not necessarily to the ada that was associated with the minting transaction. They just need to be in a UTxO that has the proper min-ada, a value which could be reduced in the future through governance actions that change the min-ada parameters. They can take part in intra-wallet transfers, etc., that would pool or move them. The min-ada value for 50 tokens isn’t very large, so the tokens could just be “parked” at an address that is holding enough ada for other reasons.

What does it have to do with NFT ?

Typically, NFTs are non-burnable tokens, with only a single one minted. Each NFT needs min-ada associated with its UTxO, so that “binds” some ada to the token.

That is true, hopefully the min ada per token will be lowered in the future if it becomes a problem with payments. :slight_smile:
10 ada is not much now but it would still be annoying if they were locked forever I think, and since many tokens can never be removed the tokens will probably just continue to accumulate in the system and lock more and more ada.

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FYI, it is technically feasible to separate the min-ADA from unwanted unburnable tokens by sending them to one’s account on an exchange and then sending back (or converting to fiat) just the ADA. However, one would have to check that doing this complies with the exchange’s terms of service.

Eventually, there also might be services (maybe at stake pools) that would buy unwanted tokens at a discount and use the min-ADA for its staking value.