ADR 11: Support return and total collateral when building transactions

Date: 2022-08-30


koslambrou <>




In Babbage era (available after the Vasil HF), Cardano transactions will contain new collateral related fields: “return collateral” and “total collateral” collateral. Return collateral (also called “collateral output”) and total collateral are detailed in CIP-40.

In summary, return collateral is a special output (basically of type TxOut) that becomes available in case there is a failed phase-2 validation. In addition, we have the new total collateral field which explicitly says how much collateral (in lovelace) is going to be actually consumed in the case of phase-2 validation failure.


  • We will add the txReturnCollateral and the txTotalCollateral fields in the Ledger.Tx.Internal.Tx data type.

  • We will modify the Wallet.Emulator.Wallet.handleBalance function in plutus-contract to set the correct return and total collateral for an UnbalancedTx (of type Either CardanoBuildTx EmulatorTx). In either type of transaction, we would compute the txTotalCollateral while estimating the fee with the formula quot (txfee txb * (collateralPercent pp)) * 100 and then set txReturnCollateral with the formula sum collateralInputs - txTotalCollateral.


As the user would want to pay the least amount of collateral, we made the decision to modify the balancing algorithm to automatically set the return collateral to the highest possible value.


The main alternative would have been to add a new constraint such as MustReturnCollateral TxOut in the constraints library to allow the users to specify the return collateral themselves. However, as explained in the Argument section, users would always want to pay the least amount of collateral. Therefore we don’t expect the need to set the return collateral manually.