Dust Amount

Alephium's unique sUTXO model combines security of the UTXO model and the expressiveness of the account model. All assets in Alephium, including the native ALPH and other tokes, are managed by UTXOs. Even though UTXO model brings many of the security benefits on to the table (e.g. see Asset Permission System), it also comes with a tradeoff that has UX implications: specifically the concept of dust amount. The goal of this article is to bring some clarity to this topic.

Every UTXO contributes to the size of the so-called UTXO set. Without an effective mechanism to control its size, UTXO set could create significant performance bottlenecks to the blockchain, especially when it comes to IO. Maintaining a relatively small UTXO set is important for Alephium to keep becoming the best version of itself: efficient, performant and scalable.

UTXO with a very small amount of value can also become uneconomical to spend if the transaction fee of spending an UTXO is more than the value of the UTXO itself. Over time this can potentially create a situation where users are not incentive-compatible with the long term health of the system.

This is a problem faced by all UTXO based blockchains. To control the size of the UTXO set, Bitcoin Core introduced the concept of dust . If a user attempts to create a UTXO with a value that is below the dust limit, Bitcoin Core will not relay it to the network to avoid state bloat of the blockchain. The concept of dust amount in Alephium is similar to the dust limit in Bitcoin but even simpler to reason about since it doesn't change depending on the type of the transaction. If a transaction output does not have at least the dust amount of ALPH, Alephium blockchain will consider the transaction invalid.

For regular UTXOs, the dust amount is 0.001 ALPH. This means that the following transaction are invalid:

1)                ----------------
                  |              | 0.0005 ALPH (ALPH too small)
    1 ALPH        |              | =============================>
================> |              |
                  |              | (0.9995 - gas fee) ALPH
                  |              | =============================>
                  ----------------

2)                ----------------
                  |              |
                  |              |
                  |              | 1 Token A
  1 Token A       |              | 0.0005 ALPH (ALPH too small)
================> |              | =============================>
                  |              |
  1 ALPH          |              | (0.9995 - gas fee) ALPH
================> |              | =============================>
                  |              | 
                  |              |
                  ----------------

3)                ----------------
                  |              |
                  |              |
   1 Token A      |              |   1 Token A (no ALPH)
================> |              | =============================>
                  |              |
   1 ALPH         |              |   (1 - gas fee) ALPH
================> |              | =============================>
                  |              | 
                  |              |
                  ----------------

The second and third case illustrate the situation where even if the user's intention is to send token A, at least a dust amount of ALPH needs to be sent as well. Button line is, each regular UTXO at least requires 0.001 ALPH or else the transaction will fail. This simple approach ensures that there is an upper bound to the size of the UTXO set in the Alephium system.

Each contract has exactly one UTXO in the Alephium system. The dust amount for contract UTXOs (also known as contract deposit) is currently set as 1 ALPH. Compared to the dust amount in the regular UTXOs, it puts a much more aggressive upper bound to the number of contracts in the system, which limits not only the size of the contract UTXO set, but also the size of the contract states managed using the account model as well. Since it is possible to reclaim the contract deposit after the contract is destroyed, it hopefully creates the right incentives for developers to keep the size of the contract state at a healthy level.

From the UX perspective, this means that creating a contract requires at least 1 ALPH as contract deposit. Concretely, if the mint price of an NFT is 100 ALPH, the total cost might be 101 ALPH after taking contract deposit into consideration. It also means that any transactions that reduce the balance of the contract to below 1 ALPH will fail.

In summary, while it does create some UX challenges, dust amount for UTXOs (and by extension contract deposit) is a pivotal to the performance, scalability and decentralization of the Alephium blockchain.