LNP-BP / LNP-BP/LNPBPs

Defining / closing seals on dust UTXO

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[CSV] [RGB]
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Description

A dust UTXO is uneconomical to spend, meaning that the value of sats it contains is below the mining fee in sat/vbyte that is required to spend it again. In order to spend the coin, it has to be consolidated with at least one other coin, that pays for the left-over transaction fee deficit.

IIRC, Bitcoin Core / Knots nodes remove such a coin from their UTXO set in memory, as it is not expected [but still possible] that it will be spent.

**However, RGB changes this dynamic.**

A seal can be defined on ANY UTXO [even a non-existing / LN output]. Thus, a seal can potentially be defined on a dust UTXO too. This means, that the "real" economical value of spending this coin is in fact **higher** than only the transfer of the sats, as it also closes the seal and thus transfers ownership of the RGB asset.

### Questions

- Should dust coins be prohibited from defining a seal upon?
- Are there any nuances to consider when closing a seal over a dust coin?
- Are there any issues with full nodes who don't have that dust coin in memory?

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First steps

  1. Read the whole issue, then the project's contributing guide.
  2. Comment on the issue to say you are picking it up — it saves two people doing the same work.
  3. Fork the repository and make your change on a branch.
  4. Open a pull request that references the issue number.

Research direction

Review the RGB seal definition and closure rules together with the Bitcoin Core/Knots UTXO behavior described in the issue. Determine whether dust UTXOs may define and close seals, including cases where full nodes do not retain the dust output. Done means documenting a clear rule and the relevant edge cases.

Written by the indexing model from the issue text.

Assessment

Domain
blockchain, distributed-systems
Issue type
Feature
Difficulty
5/5
Estimated time
Over a week
Activity status
Stale
Clarity
Needs clarification
Newbie friendliness
20/100

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