Unchained randomly selects vault addresses to spend from, until the amount equals or exceeds the chosen withdrawal amount.
When you create a bitcoin transaction, UTXOs must be selected to be spent. Our educational article can teach you more about UTXOs and how this works.
To simplify self-custody for most people, Unchained selects these UTXOs automatically for you.
Tip: If you are an experienced bitcoin user, you can manually select the UTXOs you spend out of your vault using your two keys and Caravan or an alternative wallet coordinator.
Unchained uses random address selection.
Rather than choosing UTXOs based on size, age, or other factors, Unchained randomly chooses addresses until the balance being spent equals or exceeds your withdrawal amount selected (plus miner fees). Any remaining balance will be moved to the next unused change address.
Unchained selects addresses, not individual UTXOs. If an address is selected, all of the UTXOs on that address will be spent, which is considered a best practice. The order of addresses randomly selected by a vault doesn't change until a new deposit or withdrawal occurs within that vault.
Why did Unchained choose this approach?
While random selection may seem unsophisticated at first glance, it actually manages to create an effective middle ground between two goals. It can help consolidate UTXOs over time (selecting more UTXOs than the bare minimum) while also avoiding substantially higher fees than necessary (selecting fewer UTXOs than the maximum).