Fee Budgets¶

Understanding fee budgets is crucial for effective Theft Shield protection.

What is a Fee Budget?¶

Your fee budget is the total amount of Bitcoin you're willing to spend on transaction fees to protect your funds. This budget is distributed across multiple RBF rounds, allowing Theft Shield to progressively outbid attackers.

How Budgets Work¶

Budget Distribution¶

Total Budget: 0.01 BTC

Round 1: 0.001 BTC (10%)  - Low fee, catches amateur attacks
Round 2: 0.002 BTC (20%)  - Medium escalation
Round 3: 0.003 BTC (30%)  - Strong response
Round 4: 0.004 BTC (40%)  - Maximum defense

Fee Rate Calculation¶

Each round's fee rate is calculated from:

fee_rate = round_budget / transaction_size (vBytes)

Example: - Round 4 budget: 0.004 BTC (400,000 sats) - Transaction size: 200 vBytes - Fee rate: 400,000 / 200 = 2,000 sat/vB

Budget Levels¶

Low Budget (1-2% of protected value)¶

Suitable for: - Large holdings where 1% is significant - Low-threat environments - Testing the system

Provides: - 2-3 RBF rounds - Protection against low-effort attacks - Basic defense

Medium Budget (3-5% of protected value)¶

Suitable for: - Most users - Moderate security needs - Balance of cost and protection

Provides: - 4-5 RBF rounds - Good protection against most attackers - Recommended default

High Budget (5-10% of protected value)¶

Suitable for: - High-value wallets - High-threat environments - Maximum security requirements

Provides: - 5-6 RBF rounds - Strong protection against well-funded attackers - Peace of mind

Fee Quote System¶

When you enable Theft Shield, Vigil generates a fee quote:

┌─────────────────────────────────────────┐
│           Fee Quote Summary             │
├─────────────────────────────────────────┤
│ Protected Value:     0.50000000 BTC     │
│ Number of UTXOs:     3                  │
│ Transaction Size:    250 vBytes         │
│                                         │
│ Requested Budget:    2.0%               │
│ Budget Amount:       0.01000000 BTC     │
│                                         │
│ RBF Rounds:          4                  │
│                                         │
│ Round 1: 50 sat/vB   (0.00125 BTC)     │
│ Round 2: 100 sat/vB  (0.00250 BTC)     │
│ Round 3: 200 sat/vB  (0.00312 BTC)     │
│ Round 4: 500 sat/vB  (0.00313 BTC)     │
└─────────────────────────────────────────┘

Quote Components¶

Field	Description
Protected Value	Total value of monitored UTXOs
Number of UTXOs	How many UTXOs to protect
Transaction Size	Estimated tx size in vBytes
Budget Amount	Your fee budget in BTC
RBF Rounds	Number of escalation rounds
Round Details	Fee rate and cost per round

RBF Round Strategy¶

Progressive Escalation¶

Rounds use progressively higher fees:

Round	Fee Multiplier	Strategy
1	1x	Baseline, catches amateur attacks
2	2-3x	First escalation
3	4-6x	Serious response
4+	8-10x+	Maximum defense

Why Multiple Rounds?¶

Efficiency - Don't overpay for easy defenses
Depth - Multiple chances to outbid
Adaptation - Respond to attacker escalation

Transaction Size Impact¶

More UTXOs = larger transactions = more fees needed:

UTXOs	Typical Size	Impact
1	~140 vB	Minimal fee impact
5	~400 vB	Moderate fees
10	~700 vB	Higher fees
20+	~1200+ vB	Significant fees

UTXO Consolidation

Consider consolidating UTXOs during low-fee periods to reduce transaction size and improve Theft Shield efficiency.

Budget Exhaustion¶

What Happens¶

If your fee budget is exhausted and the attacker continues bidding:

Vigil broadcasts your highest-fee PSBT
If the attacker outbids, their transaction may confirm
You're notified of the outcome

Prevention¶

Set an adequate budget (3-5% minimum recommended)
Higher value = higher budget percentage
Monitor for PSBT invalidation notifications

Adjusting Your Budget¶

When to Increase¶

After a close RBF race
When mempool fees are elevated
For high-value wallets
In high-threat environments

When to Decrease¶

For lower-value wallets
Testing on testnet
Budget constraints

How to Adjust¶

Go to Wallets → [Wallet] → Theft Shield
Click Reconfigure
Adjust the budget slider
Regenerate and sign new PSBTs

Cost Considerations¶

Only Charged if Used¶

You only pay fees if Theft Shield activates:

PSBTs are stored for free
Monitoring is included in your subscription
Fees are only spent when broadcast

Worst Case Cost¶

Your maximum cost is your fee budget. This is the price of security against theft.

Next: Signing PSBTs →