user2537: Cardano requires that every transaction output contains at least a value of 1 Ada. As the documentation points out, this means that it is not possible to send only native tokens in a transaction.
I struggle to understand the usefulness of native tokens given this constraint. In particular, I wonder how it is possible to implement a stable coin on Cardano given this limitation. I understand a stable coin to be a combination of a native token (e.g. USDT) and a smart contract that makes sure there are enough reserves and that the stable coin can be traded for Ada at the current USD exchange rate. The issue here is that these USDT can never be send without also including Ada in the transaction output. Wouldn't this severely impact the usefulness of this USDT (if not completely defeat its purpose)?
How does Cardano implement stable coins then ? And can they be sent without the minimum Ada constraint ?
Edit (clarification):
Note that this min-Ada requirement is fundamentally different from fees. Fees are due and payed to the Cardano network. This minimum Ada, however, needs to be sent to the recipient of the native token.

user1130: It seems to work fine on Ethereum. You are required to spend ETH as gas to move stable coins like USDT or USDC.
Native tokens are nice because you don't need to spend extra to move tokens, like you do for ERC20 tokens on Ethereum. On Cardano you just need to include your fee and a tiny amount of ADA.
There are conversations about Babel Fees, which would further improve the experience of using Stable coins by letting you pay your fees in native tokens. It's conceivable that you'd be able to meet your minimum UTxO value threshold in a similar way, but that's wishful thinking.

user100: EDIT: Yes, it's an issue (see comment).
The output requirement (in plutus at least) is in lovelaces (0.000001 of ADA), so it shouldn't be really an issue.

user1843: While I agree with you that fees might be a problem for native tokens, I do not understand why you make such a difference between fees and minimum value.
From a practical viewpoint: in Yoroi, when you send a native token, the minimum ADA to send (sum of fees and minimum-ada) is automatically computed. So the difference between fees and minimal transaction is transparent for the user. You do not even need to explain that difference to Yoroi users.
From a theoretical viewpoint: if you do not like the idea of minimum-ada, you can just assume that the fee structure is as follows:

Sending ADA: 0.17ADA
Sending a native token: 1.17 ADA (or a bit more for NFTs)
Receiving a native token: -0.83 ADA

So the minimum ADA value can be seen as some kind of fee. For the sender it definitely is. It is different for the receiver, which might be surprised that the fees are negative. But he should not complain about it.
However, it is true that a 1.17 ADA fee is too high for low value transactions. But this has nothing to do in particular with a stable coin, that can be used for both high-value and low-value transactions.

user157: IOHK is actually working on a solution to stable coins called Djed and you should check it out.
https://iohk.io/en/blog/posts/2021/08/18/djed-implementing-algorithmic-stablecoins-for-proven-price-stability/
Cardano research's first development is bearing fruit year-round.
Also, Hydra scaling is coming, being able to run Hyrda heads on a node will make this issue with ADA fee no longer exist.

2537: <p>Cardano requires that every transaction output contains at least a value of 1 Ada. As the documentation points out, this means that it is not possible to send only native tokens in a transaction.</p>
<p>I struggle to understand the usefulness of native tokens given this constraint. In particular, I wonder how it is possible to implement a stable coin on Cardano given this limitation. I understand a stable coin to be a combination of a native token (e.g. USDT) and a smart contract that makes sure there are enough reserves and that the stable coin can be traded for Ada at the current USD exchange rate. The issue here is that these USDT can never be send without also including Ada in the transaction output. Wouldn't this severely impact the usefulness of this USDT (if not completely defeat its purpose)?</p>
<p>How does Cardano implement stable coins then ? And can they be sent without the minimum Ada constraint ?</p>
<p><strong>Edit (clarification):</strong>
Note that this min-Ada requirement is fundamentally different from fees. Fees are due and payed to the Cardano network. This minimum Ada, however, needs to be sent to the recipient of the native token.</p>
 1130: <p>It seems to work fine on Ethereum. You are required to spend ETH as gas to move stable coins like USDT or USDC.</p>
<p>Native tokens are nice because you don't need to spend <em>extra</em> to move tokens, like you do for ERC20 tokens on Ethereum. On Cardano you just need to include your fee and a tiny amount of ADA.</p>
<p>There are conversations about <a href="https://iohk.io/en/blog/posts/2021/02/25/babel-fees/" rel="nofollow noreferrer">Babel Fees</a>, which would further improve the experience of using Stable coins by letting you pay your fees in native tokens. It's conceivable that you'd be able to meet your minimum UTxO value threshold in a similar way, but that's wishful thinking.</p>
 100: <p>EDIT: Yes, it's an issue (see comment).</p>
<p>The output requirement (in plutus at least) is in lovelaces (0.000001 of ADA), so it shouldn't be really an issue.</p>
 1843: <p>While I agree with you that fees might be a problem for native tokens, I do not understand why you make such a difference between fees and minimum value.</p>
<p>From a practical viewpoint: in Yoroi, when you send a native token, the minimum ADA to send (sum of fees and minimum-ada) is automatically computed. So the difference between fees and minimal transaction is transparent for the user. You do not even need to explain that difference to Yoroi users.</p>
<p>From a theoretical viewpoint: if you do not like the idea of minimum-ada, you can just assume that the fee structure is as follows:</p>
<ul>
<li>Sending ADA: 0.17ADA</li>
<li>Sending a native token: 1.17 ADA (or a bit more for NFTs)</li>
<li>Receiving a native token: -0.83 ADA</li>
</ul>
<p>So the minimum ADA value can be seen as some kind of fee. For the sender it definitely is. It is different for the receiver, which might be surprised that the fees are negative. But he should not complain about it.</p>
<p>However, it is true that a 1.17 ADA fee is too high for low value transactions. But this has nothing to do in particular with a stable coin, that can be used for both high-value and low-value transactions.</p>
 157: <p>IOHK is actually working on a solution to stable coins called Djed and you should check it out.</p>
<p><a href="https://iohk.io/en/blog/posts/2021/08/18/djed-implementing-algorithmic-stablecoins-for-proven-price-stability/" rel="nofollow noreferrer">https://iohk.io/en/blog/posts/2021/08/18/djed-implementing-algorithmic-stablecoins-for-proven-price-stability/</a></p>
<p>Cardano research's first development is bearing fruit year-round.</p>
<p>Also, Hydra scaling is coming, being able to run Hyrda heads on a node will make this issue with ADA fee no longer exist.</p>
