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Update: Atomicals #ARC20 Split Token Technique.

We share with you today our plan for an #ARC20 protocol update in the near future to allow the transfer of token quantities less than the 546 satoshi dust limit.

As many of you know the native BTC protocol restricts the minimum transfer size to 546 Satoshis to prevent so-called "spam attacks" on the Bitcoin blockchain. Since #ARC20 is a pure colored coin solution, the dust limit necessarily affects the token transfers as well and makes it not feasible to transfer quantities of tokens in amounts less than the 546 unit dust limit.

After careful consideration and feedback from the community, it seems the most elegant technical solution is to allow a partial coloring of UTXOs, not exceeding the total units in a UTXO. This respects the 1 token >= 1 Satoshi invariant.

The power of #ARC20 Satoshi backed coins is that each token is backed by at least 1 Satoshi, and that will never change. The ability to partially color UTXOs has 3 major advantages, we describe them here.

1. Ability to send minimum 1 token unit will be possible.

A single token unit can be inside of a UTXO of at least 546 and easily transferred around. This has been the primary concern of the community about the protocol and this will be addressed elegantly. Any token amount can be inside a UTXO as long as it is strictly less than or equal to the total Satoshis in the UTXO.

2. Accidental burning of tokens will be significantly minimized.

By enabling partial coloring, the excess tokens can overflow into the next available UTXO, capturing any potentially burned tokens and increasing reliability for recovering assets due to wallet or user errors.

3. Atomicals Virtual Machine (AVM) swaps and features.