The more UTXOs you use as inputs the more you will pay in fees. Having larger UTXOs helps minimize the size of the txn and thus the fee you pay. There’s more nuance to how what size UTXOs you want to have, but a main consideration is managing txn fees
Another thing to keep in mind is that if you have to combine multiple UTXOs to make a txn, this can reduce your privacy. Say if you mix KYCd UTXOs with non-KYC UTXOs
Okay. I didn’t know about the few part of it, I thought it was more centered around privacy. But at the same time, I thought that consolidating UTXOs was what actually hurts potential privacy. But what you said makes sense.
What happens though if you minimize your UTXOs and end up mixing KYC and nonKYC into one? Does that compromise the entire UTXO to be KYCd? Or am I missing something there?
yes
How would one alleviate this? Mix each UTXO when managing?
keep the kyc & non separate through coin control & labelling. make sure to consider the tradeoffs of consolidation and also larger and smaller outputs when mixing. consider how you manage your toxic change as well.
if you coinjoin you‘re actually better off with many small amounts of bitcoin, for greater anonymity sets, harder to say definitively who owns them. the larger the utxo the smaller the pool of possible owners
What’s the best mix size? 100k sats?
Well that depends on if you currently spend bitcoin or if you’re stacking. For everyday use 100k is a good size, but imo it’s a bit small for stacking. I would personally consolidate into utxos of at least 1M sats. This number may be different for everyone depending on your means, but my thinking is that it will become increasingly difficult to stack larger UTXOs (relative) in the future when price goes up, so might as well stack those larger UTXOs now when you can. Also if you’re going to be stacking or earning bitcoin for a long time, you can quickly end up with a lot of UTXOs you need to manage
Nice. Thanks for that info.
Sparrow makes all of this very easy to implement.
Yep, but unless you’re a baller most likely your UTXO set won’t stand out in the crowd. I would keep them at least 1M sats for stacking. There will be plenty of time to earn or buy smaller UTXOs in the future when number go up
fee* part of it 
Consolidating UTXOs can hurt your privacy, but you’re sending the UTXO to yourself so someone would have to be actively tracking vs if you spend the combined UTXOs then the person that received might know who you are and can see all the inputs to the txn and make assumptions or infer certain things from it.
I like using joinmarket when combining UTXOs either for spending or consolidating, but you can use whirlpool or wabisabi to gain or keep your privacy.
