Algorand serves as an open smart contract platform and a space for fast and secure crypto transactions. Its native token is ALGO.
Algorand uses a pure PoS (Proof of Stake) consensus mechanism in which a validator's power is directly correlated to ALGO holdings in the account. The more ALGO possessed, the bigger the validating power.
● Each account must hold a minimum balance of 0.1 ALGO
According to Algorand's policy, every account must have a minimum balance of 100,000 microAlgos (i.e. 0.1 ALGO). The purpose is to prevent network overload and transaction delays caused by massive fake accounts and fake transactions. If ever a transaction is sent that would result in a balance lower than the minimum, the transaction will fail.
● ASA affects the minimum balance requirement
ASA, or Algorand Standard Assets, are additional assets that run on the Algorand blockchain besides ALGO. To receive these assets, account owners must first grant permission manually, which is also called “opt-in”. Meanwhile, for every ASA created in the account, the minimum balance will increase by 0.1 ALGO on top of the original 0.1 ALGO. Similarly, to "opt out" an ASA, the minimum balance will decrease accordingly.