In the fullness of time, the size of the UTXO set is probably unbounded.

This is about getting more people to be able to hold keys and be able to settle to chain in any given fixed time period. We do this by increasing the density of data encoded in transactions.

SegWit and Taproot represented similar density improvements. Increasing data density is how we preserve decentralization while scaling participation.

When we don’t scale participation, we get inflation by custodians.