Protect coloured outputs

Before you start

• Supported networks: mainnet.
• Status: protocol behavior.
• Nothing here spends anything.

The problem in one sentence

An ordinary Bitcoin wallet sees satoshis, so it will happily spend the output carrying your asset to pay a fee.

The three habits

1. Two pools, always. Coloured outputs in one place, cardinal outputs in another. Never let a tool choose across both.

2. Freeze what you can. If the wallet supports marking outputs as unspendable, mark every coloured output. If it does not, keep them in a separate wallet entirely.

3. Never consolidate blindly. Consolidation is an allocation event. It merges lots, can create mixed outputs, and can burn value. Model it first.

What to check every time

Before you sign	What to confirm
The input list	Every input is the one you meant to spend
The fee source	A cardinal input, not the asset
Output values	In satoshis, sized deliberately
Expected units	Per output, matching your intent
Burn figure	Zero

The specific traps

• Send max. Sweeps everything, including coloured outputs.
• Fee bump on an old transaction. Can pull in new inputs.
• Automatic consolidation. Some wallets do it in the background.
• Exchange deposits. A deposit address is an ordinary Bitcoin address. Sending a coloured output there spends it as ordinary bitcoin. There is no recovery.

If something already moved

Read verify a transaction to find out exactly what happened, then recover from a rejection if it has not broadcast yet. A confirmed burn cannot be reversed.

Source

Wallet safety and burns.