PPP Cohort 3 Lecture 1 (English Auction): Why does the buyer get the `minLovelace` (2 ADA) in the end even though the seller payed it initially?

Question

In my example (same as in the lecture) the wallet 1 starts the auction and wallet 3 wins it. As the contract always has to have some ADA as Lars explains it looks like Wallet 1 pays 2 ADA to the contract in slot 1 to satisfy this rule as it has 2 ADA less (minus fees) in the UTxO. See:

But in the end Wallet 3 who wins the auction gets this 2 ADA. I guess those 2 ADA have to be there to cover some fees in some special cases. But why does Wallet 3 and not Wallet 1 gets the 2 ADA in the end?

Answer 1

Due to my low rep score, I cannot comment in Mitchell Turner's answer, so I answer here instead :)

As Mitchell said, all UTxOs must have the minLovelace amount of ADA attached to it. I just want to add a couple points to it

1. The amount of minLovelace (in the EnglishAuction) is hardcoded by Lars to 2 ADA - https://github.com/input-output-hk/plutus-pioneer-program/blob/main/code/week01/src/Week01/EnglishAuction.hs#L54

2. When Wallet1 closes the Auction, token T is sent to Wallet3 -> so the 2 ADA stored alongside token T is send to Wallet3 as well (See this https://github.com/input-output-hk/plutus-pioneer-program/blob/main/code/week01/src/Week01/EnglishAuction.hs#L323)

3. This min-ada-value requirement will set size bound to both max number of UTxO and max UTxO size. Main reason is: A ledger without a size bound is vulnerable to being populated by so much data that users will unable to process it (or run a node) with machines meeting the recommended specifications for running a node.

4. min-ada-value is adjusted and calculated values depending on size of UTxO (note: 1 UTxO can contains multiple different types of Tokens including ADA)

You can see this for more information https://docs.cardano.org/native-tokens/minimum-ada-value-requirement

If the address is not spendable by the user sending the tokens, the ada sent alongside the tokens no longer belongs to the sender

Before transferring custom tokens, users may choose to use off-chain communication to negotiate who supplies the ada to cover the min-ada-value in the output made by the transferring transaction

Answer 2

As the contract always has to have some ADA

All UTxOs must have the minLovelace amount of ADA attached to it. That includes UTxOs at script addresses and in wallets. A transaction couldn't output the T token to Wallet 3 without including the minLovelace ADA (both are included in the same UTxO).

This is so bad actors don't just mint tons of new UTxOs and bloat the network. There is a maximum number of UTxOs that can exists since ADA is capped.