UTXO-based Coordination

PACT SWAP introduces a novel coordination mechanism for native Bitcoin swaps using dust-lock UTXOs. Unlike account-based chains, Bitcoin's UTXO model makes traditional order matching and settlement more complex. To solve this, PACT SWAP uses a small UTXO (the "dust lock") embedded with a flag like ANYONECANPAY, which uniquely binds an order to a single incoming transaction.

When a taker attempts to fulfill an order, they must include the correct dust-lock UTXO in their transaction. Since a UTXO can only be spent once, this enforces a one-to-one mapping between a swap order and its settlement — preventing double-matching or front-running. The dust-lock acts as a lightweight yet trustless order signature, embedded directly in the Bitcoin transaction structure.

This mechanism enables truly peer-to-peer matching on Bitcoin without intermediaries, bridges, or vaults. It's efficient, secure, and fully compatible with the Bitcoin protocol. By leveraging native UTXO behavior, PACT SWAP opens the door to scalable, on-chain cross-chain swaps for Bitcoin users — without ever wrapping BTC or relying on off-chain custodians.