Decentralized UTXO index

exSat stores the full UTXO dataset, which's directly accessible by smart contracts. It's important to note that for DApps, this UTXO data is read-only. To modify the UTXO data, a transaction must be sent to the Bitcoin network. The Data Consensus Protocol will then sync the latest Bitcoin blocks onto exSat and parse them to update the UTXO data. Since exSat begins syncing blocks from Bitcoin's block height 840,000, the storage and update of UTXO data are handled in two parts:

1. UTXO Data Generated Before Block 840,000: This data was parsed and uploaded by exSat in a trusted manner. The data is under audit by multiple security agencies using different methods to ensure the accuracy of both the UTXO data itself and the UTXOs stored on-chain. More details can be found at UTXO Initialization.

2. UTXO Data Generated After Block 840,000: Synchronizers and Validators upload Bitcoin blocks starting from height 840,000. The exSat contracts then parse the block data and update the UTXO dataset.

With UTXO data stored on-chain in exSat, several innovative smart contract functionalities can be unlocked, including:

• Cross-chain bridge with more security and more assets.

• BTC Staking & Lending without bridge.

• Constructing decentralized Lightning Network channels that interact with the Lightning Network.

• Combining with asset custody solutions to create cross-chain asset issuance platforms between Bitcoin and exSat, allowing assets to be issued on Bitcoin at lower costs.