31 sats \ 2 replies \ @tptrevethan OP 1 Feb \ parent \ on: Mercury layer AMA bitcoin
This is the major limitation (only sending full UTXOs) which makes it not a great solution for general, or retail, payments. You could imagine a change/swapping feature (like paying for things in cash, using different denomination coins and getting change) - but the UTXO model doesn't work well for small amounts in a high fee environment.
The whole UTXO model does lend itself to some use cases though - the first was coinswaps for privacy. Others are things like gift cards, casino chips (for online gambling maybe). Also (bit controversial) NFTs and ordinals - at least these could be transferred off-chain (reducing on-chain bloat).
Unlike LN, there are no inbound or routing liquidity issues and large amounts can be sent to anyone instantly. So one possibility is wallets that handle both LN and mercury - payments could automatically be made in a combination with the bulk that that's too big for LN sent via mercury fixed values and the remainder with LN.
What about sending a single large UTXO to multiple Mercury statechain addresses, broken down into denominations, e.g.:
1.2M sat UTXO (or whatever > 1.2 M if also including a change address) sent to multiple addresses with the following amounts (in sats)
10,000 20,000 40,000 80,000 160,000 320,000 640,000 ------- 1.27M sat total
Or some other combination totaling <whatever> Then you have multiple denominations on the statechain to spend in a more retail-like setting that together can add up to any desired amount (within the nearest <smallest denomination>). If enough people have done this, we don't need small UTXOs that exist 1:1 with small UTXOs on main chain.
Question: does the protocol allow for initial injection of a single UTXO on main chain into multiple statecoins?
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In order to be able to transfer the key and provide the backup, currently the whole UTXO must be transferred.
You could split a utxo into a backup with more than one output, but then if each one gets transferred separately, you have to start creating a chain of backup transactions that would get bigger and bigger.
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