The counterparty risk of holding Cashu-mint–issued ecash sats is proportional to the holding time. The longer you hold ecash sats issued by a Cashu mint, the greater your counterparty risk.
When a user wants to send 10,000 Cashu ecash sats to a friend for better privacy and convenience (without needing the recipient’s address), Keychat Wallet can combine the minting and sending of Cashu sats into a single operation instead of maintaining a continuous 10,000-ecash-sat balance. This reduces the time the user holds the ecash sats.
Thus, the Cashu mint is better used as a privacy-preserving bridge rather than for secure long-term storage.
Imagine Keychat Wallet supporting both an Ark wallet and a Cashu wallet.
Most funds would be kept in the Ark wallet, while the Cashu wallet balance would be automatically kept at 1,000 sats.
If the Cashu balance drops below 1,000 sats, Ark sats would be automatically converted into Cashu sats; if it rises above 1,000 sats, Cashu sats would be automatically converted back into Ark sats.
That way, a user’s maximum loss from a Cashu mint failure would be limited to 1,000 sats.
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