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I'm running IBD on a machine with 8GB ram with prune=550 and dbcache=7000 and noticing that memory usage is not going above ~880mb. Seems unusual and I assume it's related to pruning. I found a couple old threads on github about this but it sounded like there were improvements made?

What's the current status of the interaction between prune and dbcache during ibd?

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Yes.

Whenever pruning kicks in because the maximum size (550 MiB in your example) is reached, the chainstate database needs to be flushed to disk, because otherwise, if the process were to shutdown uncleanly, you could have an inconsistent state where the chainstate refers to an old block that no longer exists on disk.

Due to peculiarities of the design of the Bitcoin Core UTXO cache, when the cache is flushed to disk, it is also wiped.

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