Cardano minted 318m ADA ($696m USD) post-genesis

as i shared yesterday (thread below) back in 2021 there was an unannounced deletion of UTxOs worth 318m ADA ($696m USD at the time) from Cardano's mainnet.

at the same time, 318m additional ADA was added into the RESERVES (where staking rewards come from) of the network.

the net effect of this resulted in 0 change in the lovelaces (ADA's satoshis) of the network, so it was not well understood what had happened, or why.

here's the code (direct github link to official cardano repo here: https://github.com/IntersectMBO/cardano-ledger/commit/010a7fa991b1f61b685e6b03382cd2e4dacfc30c#diff-870d2aa85f7e191b00b8473461601a93dd009b5ed3bbb84311441f2164cb3a9bR1110-R1123 ):

https://preview.redd.it/16tsrn50380f1.png?776&format=png&auto=webp&s=6da7e2c0756884378a18b58a13c1528bcb3a257c

lines 1110 - 1114: the function definition of "returnRedeemAddrsToReserves", defining its inputs and outputs
line 1118: gets the set of all UTxOs
line 1119: splits the UTxO set into presale (redeemer) and normal (nonredeemers) UTxOs
line 1121: gets the sum of all the ADA balances of the presale UTxOs and ADDS it to the current acnt (reserve pool) balance, then assigns it to the acnt' (account prime, the new account balance)
line 1122: sets the new UTxO set to be ONLY normal (nonredeemer) UTxOs.

1121 is where the new new tokens are added.
1122 is where the old UTxOs are left out.

the reason this is a MINTING and not a transfer is NO cryptographic keys are used to consume the UTxOs that were dropped from the ledger.

it just happens that the same amount of ADA was minted into the reserves (controlled by the genesis keys), which is why no one really noticed what went on.

this function was called/executed at a hard fork epoch boundary, along with a protocol upgrade signed by IOG's genesis keys.

it violates a basic tenet of crypto - "not your keys, not your crypto" as the cryptographic keys of the UTxOs in question were NOT used in this, rather the primary developer of cardano (Charles Hoskinson's IOG) made this change unilaterally with no community discussion about the impacts and effects.

more background here: www.reddit.com/r/CryptoCurrency/comments/1kjc51g/696m_worth_of_utxos_deleted_from_cardano_by/

or direct twitter thread here:
https://x.com/masatoalexander/status/1920141651344838993