Categories: Technology · Platform Updates
Vaultody Milestones: UTXO Automation Vaults & Polygon Blockchain Integration
Published: July 31, 2024 · Reading time: 3 minutes
Overview: Expanding Institutional Digital Asset Support
Vaultody has reached two important product milestones that expand what institutions can do with our custody infrastructure. Support for UTXO-based cryptocurrencies has been added to Automation Vaults, and the Polygon blockchain is now integrated into General Vaults. Together, these updates give clients broader asset coverage and more flexible automation across their digital asset operations.
Both enhancements build on our existing General Vaults and Automation Vaults, enabling more efficient handling of a wider range of cryptocurrencies under a single, policy-driven framework.
UTXO Protocols in Vaultody Automation Vaults
Automation Vaults now support major UTXO-based protocols, allowing institutions to automate complex transaction flows for a new class of assets. Supported protocols include Bitcoin, Litecoin, Bitcoin Cash, Dogecoin, Dash, ZCash and other UTXO-compatible networks, with additional assets to be added over time.
Previously, many automation scenarios were easier to implement on account-based chains, because UTXO behavior required extra operational work. With this release, UTXO assets gain the same automation benefits as account-based networks inside Vaultody.
Why UTXO Automation Matters
In account-based systems, every address used for sending or receiving funds typically has to be explicitly linked and configured inside the custody system. This can create friction when an institution manages large address inventories across multiple business lines.
In UTXO-based networks such as Bitcoin and Litecoin, each transaction spends one or more previous outputs and creates new ones. With Vaultody’s UTXO support, once your addresses are configured in an Automation Vault, the platform automatically interprets and processes new UTXOs. There is no need to manually link each individual address every time you expand your address set.
This greatly reduces manual intervention for teams that manage high volumes of UTXO transactions, such as exchanges, payment processors and OTC desks.
How Automation Vaults Work with UTXO Assets
Automation Vaults allow you to define rules that execute when certain conditions are met across the addresses associated with a vault. Examples include:
- Automatically sweeping small UTXO balances into a primary treasury address.
- Consolidating fragmented UTXOs to reduce future transaction fees.
- Routing funds to specific internal accounts once incoming deposits are confirmed.
- Triggering alerts or approvals when thresholds are exceeded.
By moving these actions into policy-based automation, institutions can increase operational efficiency, lower the risk of manual errors and make their UTXO-based asset flows more predictable and auditable.
Understanding the UTXO Model
Unspent Transaction Outputs (UTXOs) are the fundamental building blocks of several major blockchains, including Bitcoin and Litecoin. Each transaction consumes existing UTXOs as inputs and creates new ones as outputs. For a transaction to be valid, the total value of its inputs must equal the total value of its outputs plus fees, which prevents new coins from being created arbitrarily.
This model offers strong transparency and traceability, but it also introduces operational complexity when you manage thousands of addresses and outputs. Vaultody’s Automation Vaults abstract that complexity, so institutions can work with UTXO assets through clear, policy-driven workflows instead of manual address-by-address operations.
Polygon Integration in Vaultody General Vaults
In parallel with UTXO support, Vaultody has integrated the Polygon blockchain into General Vaults. Institutions can now custody and manage Polygon-based assets alongside other supported networks in the same secure infrastructure.
This integration gives clients direct access to assets running on Polygon, a leading network for scaling Ethereum-based applications and tokens.
Why Polygon Was Prioritized
Polygon, formerly known as Matic Network, is an EVM-compatible protocol designed to improve Ethereum’s scalability. It provides faster block times and significantly lower transaction fees, while remaining closely aligned with the Ethereum ecosystem.
Among Vaultody clients, Polygon has been one of the most requested chains for institutional custody. Because of this demand and its strategic importance in DeFi, gaming, and enterprise use cases, Polygon was selected as one of the first additional blockchains to integrate into General Vaults, with further chains already in the pipeline.
Next Steps for Polygon Across Vaultody Solutions
Bringing Polygon into General Vaults is the first step toward full network coverage across the platform. Our roadmap includes:
- Extending Polygon support to Automation Vaults, enabling automated workflows for Polygon-based assets.
- Adding Polygon to Smart Vaults, so institutions can use advanced MPC-based policies with Polygon tokens.
Beyond Polygon, we are actively working on integrating a broader set of blockchains into all three vault types. Networks currently on our development list include Solana, Base, Avalanche, Arbitrum and Sui, with additional integrations planned according to institutional demand and security criteria.
What These Milestones Mean for Institutions
Together, UTXO support in Automation Vaults and Polygon integration in General Vaults strengthen Vaultody’s position as a comprehensive infrastructure layer for institutional digital assets. Key benefits for clients include:
- Broader asset coverage across both UTXO-based and account-based blockchains.
- Reduced operational overhead through automation of UTXO-based workflows.
- Access to Polygon’s ecosystem within a governed, MPC-backed custody environment.
- A clear roadmap for additional high-demand chains, aligned with institutional requirements.
Our goal is to give exchanges, banks, fintechs, funds and other professional participants a unified, policy-driven way to manage digital assets at scale, regardless of the underlying protocol.
Learn More and Talk to Our Team
If you would like to explore how UTXO automation or Polygon support can improve your operations, our team is available to help you evaluate deployment options, security policies and integration paths.
You can contact us through the Vaultody website or book a dedicated call to review your use case in more detail.
Key Facts at a Glance
- UTXO-based cryptocurrencies such as Bitcoin, Litecoin, Dogecoin, Dash, ZCash and Bitcoin Cash are now supported in Vaultody Automation Vaults.
- Automation Vaults can apply rules to UTXO addresses without requiring every individual address to be manually linked.
- Polygon has been integrated into Vaultody General Vaults for institutional custody and management of Polygon-native assets.
- Upcoming work includes Polygon support for Automation and Smart Vaults and new integrations for Solana, Base, Avalanche, Arbitrum and Sui.