feat: add dust output removal function, add tests

src/constants/dlc-handler.constants.ts

@@ -5,3 +5,5 @@ export const DLCHandlers = {
   LEDGER: 'ledger',
   DFNS: 'dfns',
 } as const;
+
+export const DUST_LIMIT = 546n;

src/functions/bitcoin/bitcoin-functions.ts

@@ -17,6 +17,7 @@ import { bitcoin, regtest, testnet } from 'bitcoinjs-lib/src/networks.js';
 import { Decimal } from 'decimal.js';
 import * as ellipticCurveCryptography from 'tiny-secp256k1';
 
+import { DUST_LIMIT } from '../../constants/dlc-handler.constants.js';
 import {
   BitcoinInputSigningConfig,
   BitcoinTransaction,
@@ -46,6 +47,17 @@ export function getFeeAmount(bitcoinAmount: number, feeBasisPoints: number): num
   return new Decimal(bitcoinAmount).times(feePercentage).trunc().toNumber();
 }
 
+export function removeDustOutputs(
+  outputs: { address: string; amount: bigint }[],
+  dustLimit = DUST_LIMIT
+): void {
+  for (let i = outputs.length - 1; i >= 0; i--) {
+    if (outputs[i].amount < dustLimit) {
+      outputs.splice(i, 1);
+    }
+  }
+}
+
 /**
  * Derives the Public Key at the Unhardened Path (0/0) from a given Extended Public Key.
  * @param extendedPublicKey - The base58-encoded Extended Public Key.

src/functions/bitcoin/psbt-functions.ts

@@ -4,18 +4,18 @@ import { P2Ret, P2TROut } from '@scure/btc-signer/payment';
 import { Network, Psbt } from 'bitcoinjs-lib';
 import { PartialSignature } from 'ledger-bitcoin/build/main/lib/appClient.js';
 
+import { DUST_LIMIT } from '../../constants/dlc-handler.constants.js';
 import { BitcoinInputSigningConfig, PaymentTypes } from '../../models/bitcoin-models.js';
 import { reverseBytes } from '../../utilities/index.js';
 import {
   ecdsaPublicKeyToSchnorr,
   getFeeAmount,
   getFeeRecipientAddress,
   getUTXOs,
+  removeDustOutputs,
 } from '../bitcoin/bitcoin-functions.js';
 import { fetchBitcoinTransaction } from './bitcoin-request-functions.js';
 
-const DUST_LIMIT = 546n;
-
 /**
  * Creates a Funding Transaction to deposit Bitcoin into an empty Vault.
  * Uses the UTXOs of the User to create the Funding Transaction.
@@ -61,7 +61,9 @@ export async function createFundingTransaction(
   const psbtOutputs = [
     { address: multisigAddress, amount: depositAmount },
     { address: feeAddress, amount: BigInt(feeAmount) },
-  ].filter(output => output.amount >= DUST_LIMIT);
+  ];
+
+  removeDustOutputs(psbtOutputs);
 
   const selected = selectUTXO(userUTXOs, psbtOutputs, 'default', {
     changeAddress: depositAddress,
@@ -206,7 +208,9 @@ export async function createDepositTransaction(
       address: multisigAddress,
       amount: BigInt(depositAmount) + BigInt(vaultTransactionOutputValue),
     },
-  ].filter(output => output.amount >= DUST_LIMIT);
+  ];
+
+  removeDustOutputs(depositOutputs);
 
   const depositSelected = selectUTXO(depositInputs, depositOutputs, 'all', {
     changeAddress: depositAddress,
@@ -326,9 +330,9 @@ export async function createWithdrawTransaction(
     });
   }
 
-  const filteredOutputs = outputs.filter(output => output.amount >= DUST_LIMIT);
+  removeDustOutputs(outputs);
 
-  const selected = selectUTXO(inputs, filteredOutputs, 'default', {
+  const selected = selectUTXO(inputs, outputs, 'default', {
     changeAddress: withdrawAddress,
     feePerByte: feeRate,
     bip69: false,

tests/mocks/bitcoin.test.constants.ts

@@ -46,3 +46,10 @@ export const TEST_FEE_RECIPIENT_PUBLIC_KEY_1 =
 export const TEST_FEE_DEPOSIT_BASIS_POINTS_1 = 100n;
 
 export const TEST_FEE_RATE_1 = 6n;
+
+export const TEST_OUTPUTS = [
+  { address: 'addr1', amount: 1000n },
+  { address: 'addr2', amount: 545n },
+  { address: 'addr3', amount: 546n },
+  { address: 'addr4', amount: 100n },
+];

tests/unit/bitcoin-functions.test.ts

@@ -12,6 +12,7 @@ import {
   getInputIndicesByScript,
   getScriptMatchingOutputFromTransaction,
   getUnspendableKeyCommittedToUUID,
+  removeDustOutputs,
 } from '../../src/functions/bitcoin/bitcoin-functions';
 import {
   TEST_TESTNET_ATTESTOR_EXTENDED_GROUP_PUBLIC_KEY_1,
@@ -31,6 +32,7 @@ import {
   TEST_ALICE_NATIVE_SEGWIT_PUBLIC_KEY_2,
   TEST_ALICE_TAPROOT_PUBLIC_KEY_1,
   TEST_ALICE_TAPROOT_PUBLIC_KEY_2,
+  TEST_OUTPUTS,
   TEST_TAPROOT_MULTISIG_PAYMENT_SCRIPT_1,
   TEST_TAPROOT_UNHARDENED_DERIVED_PUBLIC_KEY_1,
   TEST_UNHARDENED_DERIVED_UNSPENDABLE_KEY_COMMITED_TO_UUID_1,
@@ -68,6 +70,26 @@ describe('Bitcoin Functions', () => {
     });
   });
 
+  describe('removeDustOutputs', () => {
+    it('removes single dust output', () => {
+      const outputs = [TEST_OUTPUTS[0], TEST_OUTPUTS[1]];
+      removeDustOutputs(outputs);
+      expect(outputs).toEqual([TEST_OUTPUTS[0]]);
+    });
+
+    it('removes multiple dust outputs', () => {
+      const outputs = [...TEST_OUTPUTS];
+      removeDustOutputs(outputs);
+      expect(outputs).toEqual([TEST_OUTPUTS[0], TEST_OUTPUTS[2]]);
+    });
+
+    it('keeps all outputs if none are dust', () => {
+      const outputs = [TEST_OUTPUTS[0], TEST_OUTPUTS[2]];
+      removeDustOutputs(outputs);
+      expect(outputs).toEqual(outputs);
+    });
+  });
+
   describe('getFeeRecipientAddress', () => {
     describe('mainnet', () => {
       const network = bitcoin;

tests/unit/psbt-functions.test.ts

@@ -46,7 +46,7 @@ describe('PSBT Functions', () => {
     jest.clearAllMocks();
   });
   describe('createFundingTransaction', () => {
-    it('should successfully create a valid funding transaction', async () => {
+    it('should successfully create a valid funding transaction and exclude change output under dust limit', async () => {
       jest
         .spyOn(bitcoinFunctions, 'getUTXOs')
         .mockImplementationOnce(async () => TEST_BITCOIN_REGTEST_NATIVE_SEGWIT_UTXOS_1);
@@ -83,5 +83,39 @@ describe('PSBT Functions', () => {
         )
       ).not.toThrow();
     });
+    it('should successfully create a valid funding transaction and exclude fee output under dust limit', async () => {
+      jest
+        .spyOn(bitcoinFunctions, 'getUTXOs')
+        .mockImplementationOnce(async () => TEST_BITCOIN_REGTEST_NATIVE_SEGWIT_UTXOS_1);
+
+      const depositTransaction = await createFundingTransaction(
+        TEST_REGTEST_BITCOIN_BLOCKCHAIN_API,
+        regtest,
+        9900n,
+        multisigPayment,
+        depositPayment,
+        TEST_FEE_RATE_1,
+        TEST_FEE_RECIPIENT_PUBLIC_KEY_1,
+        TEST_FEE_DEPOSIT_BASIS_POINTS_1
+      );
+
+      expect(depositTransaction).toBeDefined();
+      expect(depositTransaction.inputsLength).toBe(1);
+      expect(depositTransaction.outputsLength).toBe(2);
+      expect(depositTransaction.getOutput(0).amount?.toString()).toBe('9900');
+      expect(depositTransaction.getOutput(0).script).toStrictEqual(multisigPayment.script);
+      expect(depositTransaction.getOutput(1).amount?.toString()).toBe('99989182');
+      expect(depositTransaction.getOutput(1).script).toStrictEqual(depositPayment.script);
+      expect(() =>
+        depositTransaction.sign(
+          deriveUnhardenedKeyPairFromRootPrivateKey(
+            TEST_BITCOIN_REGTEST_NATIVE_SEGWIT_XPRIV_1,
+            regtest,
+            'p2wpkh',
+            0
+          ).privateKey!
+        )
+      ).not.toThrow();
+    });
   });
 });