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How should Bitcoin exchanges complete their UTXO consolidations and what factors should they consider i.e. regularity, fixed or variable intervals, consolidate into how many UTXOs etc?

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Every user including exchanges are free to consolidate UTXO as they want.

Although its better to do it during weekends and use low fee rate: https://bitcoinops.org/en/xapo-utxo-consolidation/

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