🔁Wallet Recovery Mechanism on Pteri

When importing a Litecoin wallet using a mnemonic phrase, many users assume that previously associated transactions and balances will automatically appear in the newly imported wallet. However, this is not always the case. In Pteri Wallet, importing a wallet using a mnemonic seed triggers a new derivation process, effectively generating a fresh wallet structure based on the same seed. This can cause confusion when previous funds do not immediately reflect in the new instance. It's important to understand that the blockchain deals with addresses, not wallets. In Pteri, whether you're creating or importing a wallet, the default address derivation remains consistent — so the addresses stay the same. However, unless the old UTXOs (Unspent Transaction Outputs) are recovered, the user cannot spend those funds, even though they may be visible in the wallet. Access to funds requires spendable UTXOs, not just the presence of an address with a balance.

This guide explains the recovery mechanism Pteri uses to resolve this issue and ensure that all funds associated with your default wallet addresses are accurately recovered and usable in your new wallet environment.

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Understanding the Problem: Why Old Funds Can’t Be Spent Immediately

When a user imports a Litecoin wallet using their 12 or 24-word mnemonic phrase:

• A new wallet structure is generated.

• This new structure does not inherently include previously existing UTXOs (Unspent Transaction Outputs) from the original wallet.

• Therefore, funds tied to default ltc1 (native segwit), L (legacy) and M (segwit) addresses can not be spent in the imported wallet.

Attempting to send funds directly from the newly imported wallet will fail if no valid UTXOs are detected, even if the user previously had funds in the same mnemonic-based wallet.

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Why Does This Happen?

Litecoin, like Bitcoin, uses UTXOs to manage wallet balances. Simply importing a mnemonic does not move the associated unspent outputs into the newly derived wallet instance. As a result:

• The imported wallet does not recognize or manage the old UTXOs.

• Funds are not actually missing — they remain safely stored on the blockchain under the user’s original address, but cannot be spent until their UTXOs are recovered.

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The Recovery Solution by Pteri

To address this, Pteri uses an automated recovery mechanism that enables seamless access to your old funds by making them spendable within the newly imported wallet. A minimum balance of 0.01 LTC must be available in both L and M address to successfully initiate the recovery of funds and tokens.

How the Recovery Mechanism Works:

1. Identify all Default Addresses:

   • Scan for funds on your old ltc1 , L and M address.

2. Transfer to Primary Address:

   • Move all available funds from the L and M address to the ltc1... Bech32 primary address.

   • This creates a new UTXO for ltc1 address under the new wallet structure.

3. Preserve UTXO History:

   • Old UTXOs from the original wallet are recorded for use in the first outbound transaction from the newly imported wallet.

4. Token Recovery:

   • Recovery of M address tokens require the same approach.

   • At least 0.01 LTC must be present in M address to initiate token recovery.

   • Funds are transferred to the ltc1 address and new UTXO is created under M for proper visibility and sending of tokens.

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Why 0.01 LTC Minimum?

We enforce a minimum threshold of 0.01 LTC:

• To ensure all old UTXOs are fully consumed in the recovery transaction.

• This prevents leftover fragments of unspent funds.

• The amount covers standard transaction fees; Pteri does not charge extra for this service.

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Post-Recovery: What You Can Expect

• All recovered funds are safely consolidated under the ltc1 address.

• Users can choose to transfer funds back to M address if needed.

• The wallet can now fully manage these UTXOs and support transactions moving forward.

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Conclusion: Transparent, Safe, and Self-Custodied

Pteri's recovery mechanism ensures that users retain full control and access to their previously existing funds when importing a wallet using mnemonics.

By transferring and consolidating UTXOs into the newly derived structure, Pteri makes sure:

• Your assets are never lost.

• Your tokens and funds remain in your control.

• You can resume transactions seamlessly.

This mechanism aligns with our commitment to self-custody, transparency, and user empowerment.