Atomicals has proposed a token splitting solution for ARC-20 tokens, aiming to break through the dust limit of Bitcoin and achieve high-precision transactions.

BlockBeats reported on December 7th that Atomicals proposed an innovative split solution for ARC-20 tokens in their official documentation, aiming to solve the "dust limit" problem in the Bitcoin network. In the Bitcoin network, the minimum unit of a single UTXO transfer is 546 satoshis, which limits the application of ARC-20 tokens in small transactions. The proposed solution by Atomicals redefines the number of satoshis required to support a single ARC-20 token by introducing a "Substantiation Factor" (SF), overcoming this limitation. The core of this solution is to allow token holders to convert their token units from 1:1 to smaller ratios such as 1:10, 1:100, etc., essentially "splitting" or "subdividing" their token units to any precision. It is worth noting that executing this operation requires providing regular satoshis as collateral for the token unit. By default, ARC-20 operates with 0 decimal places, which is equivalent to 1:1 substantiation. Changing the exponent to obtain decimal places can achieve different ratios of "rescaling" or "re-substantiation". For example, to trade 1 token unit while respecting the dust limit, one only needs to substantiate each token unit with 1,000 satoshis, and then execute a transfer of 1,000 satoshis, with an exponent of 3. This solution not only maintains the fungibility and liquidity of ARC-20 tokens, but also greatly improves the flexibility and precision of transactions.