I like this proposal - it's simpler than ours and the stateless design is really elegant.
But it's not flexible enough for our use case. Two main concerns:
1. Doesn't support imported wallets
2. No good UX if passkey is deleted. User would have to create a new passkey/wallet, then decide how to transfer funds - consolidate all UTXOs in one transaction and lose privacy? Or transfer UTXO by UTXO and lose funds to fees?