This article will cover the basics of UTXOs and provide simple guides on consolidating UTXOs in your Bitcoin address.
What are UTXOs?
UTXOs or “Unspent Transaction Outputs” are the unspent outputs of all the transactions made in your address. When you send or receive Bitcoin, a UTXO is spent or created. Pre-existing UTXOs in your address are used as the inputs for your transactions, and the leftover or unspent Bitcoin from those transactions is sent back to your address as a new UTXO.
Why would I want to consolidate my UTXOs?
If you are a power user of Xverse and an Ordinal enjoyoor, you may have experienced a period of extremely high fees when transacting in your Xverse wallet. This can be partly due to the accumulation of many small UTXOs in your payment address. Because transaction fees are determined by the number of inputs/transaction size, consolidation is a practical technique to combine smaller UTXOs into fewer, larger UTXOs, reducing the size of future transactions. Think of this process as exchanging a jar of change for a $20 bill.
Some use cases for UTXO consolidation:
- minimize future fees
- avoid transfer issues caused by having too many UTXOs in a single address (this is an arbitrary limit of 500 UTXOs set by the Mempool API)
How do I consolidate my UTXOs in Xverse?
Currently, the best way to consolidate your UTXO set in Xverse is to create a transaction from the desired address that includes those small UTXOs and send it to yourself (back to the address). This is usually accomplished by sending the entire balance consolidating all your UTXOs into one UTXO. The smaller the transaction you send to yourself, the less consolidated your UTXOs are.
Fix for too many UTXOs
The default BTC API used in Xverse is https://mempool.space/api/, which sets a limit of 500 UTXOs per address. If your address has reached the UTXO limit set by mempool.space, you may receive an Axios 400 error message when trying to send Bitcoin.
Users can fix this issue by going to:
- Change Network
- Edit the BTC API URL to be https://btc-1.xverse.app
You should now be able to consolidate your UTXOs and transact normally.
Have questions for our team? Need help with this process? Please contact our support team.