fix(wallet): retry coin selection on NoChange to avoid dust/zero drai…

src/wallet/mod.rs

@@ -1467,16 +1467,37 @@ impl Wallet {
             }
         };
 
-        let coin_selection = coin_selection
-            .coin_select(
-                required_utxos,
-                optional_utxos,
-                fee_rate,
-                outgoing + fee_amount,
-                &drain_script,
-                rng,
-            )
-            .map_err(CreateTxError::CoinSelection)?;
+        // Retry coin selection to avoid dust/zero drain outputs (see issue #376). If the
+        // selection yields NoChange the loop promotes an optional UTXO to required and retries;
+        // it exits when optional_remaining is exhausted or a viable drain output is found.
+        let should_retry_for_dust_drain = params.recipients.is_empty()
+            && params.drain_to.is_some()
+            && (params.drain_wallet || !params.utxos.is_empty())
+            && !params.manually_selected_only;
+
+        let mut required_for_attempt = required_utxos;
+        let mut optional_remaining = optional_utxos;
+        let coin_selection = loop {
+            let result = coin_selection
+                .coin_select(
+                    required_for_attempt.clone(),
+                    optional_remaining.clone(),
+                    fee_rate,
+                    outgoing + fee_amount,
+                    &drain_script,
+                    rng,
+                )
+                .map_err(CreateTxError::CoinSelection)?;
+
+            if !should_retry_for_dust_drain || !matches!(&result.excess, Excess::NoChange { .. }) {
+                break result;
+            }
+
+            let Some(w) = optional_remaining.pop() else {
+                break result;
+            };
+            required_for_attempt.push(w);
+        };
 
         let excess = &coin_selection.excess;
         tx.input = coin_selection

tests/drain_to_dust_pull_utxo.rs

@@ -0,0 +1,77 @@
+use bdk_wallet::test_utils::*;
+use bdk_wallet::KeychainKind;
+use bitcoin::{hashes::Hash, psbt, Amount, OutPoint, ScriptBuf, TxOut, Weight};
+
+// Ensures coin selection pulls a local UTXO when drain-only selection would produce dust.
+#[test]
+fn test_drain_to_pulls_local_utxo_when_foreign_only_dust() {
+    let (mut wallet, _) = get_funded_wallet_wpkh();
+    let drain_spk = wallet
+        .next_unused_address(KeychainKind::External)
+        .script_pubkey();
+
+    let witness_utxo = TxOut {
+        value: Amount::from_sat(500),
+        script_pubkey: ScriptBuf::new_p2a(),
+    };
+    // Remember to include this as a "floating" txout in the wallet.
+    let outpoint = OutPoint::new(Hash::hash(b"foreign-p2a-prev"), 1);
+    wallet.insert_txout(outpoint, witness_utxo.clone());
+    let satisfaction_weight = Weight::from_wu(71);
+    let psbt_input = psbt::Input {
+        witness_utxo: Some(witness_utxo),
+        ..Default::default()
+    };
+
+    let mut tx_builder = wallet.build_tx();
+    tx_builder
+        .add_foreign_utxo(outpoint, psbt_input, satisfaction_weight)
+        .unwrap()
+        .only_witness_utxo()
+        .fee_absolute(Amount::from_sat(400))
+        .drain_to(drain_spk);
+
+    let psbt = tx_builder.finish().unwrap();
+    let tx = psbt.unsigned_tx;
+    assert!(tx.input.len() >= 2);
+    assert!(!tx.output.is_empty());
+    assert!(
+        tx.input.iter().any(|txin| txin.previous_output == outpoint),
+        "foreign_utxo should be in there"
+    );
+}
+
+// Foreign value equals fee: no satoshis left for a drain output until a wallet UTXO is included.
+#[test]
+fn test_drain_to_pulls_local_utxo_when_foreign_value_equals_fee() {
+    let (mut wallet, _) = get_funded_wallet_wpkh();
+    let drain_spk = wallet
+        .next_unused_address(KeychainKind::External)
+        .script_pubkey();
+
+    let witness_utxo = TxOut {
+        value: Amount::from_sat(200),
+        script_pubkey: ScriptBuf::new_p2a(),
+    };
+    let outpoint = OutPoint::new(Hash::hash(b"foreign-p2a-prev-200"), 1);
+    wallet.insert_txout(outpoint, witness_utxo.clone());
+    let satisfaction_weight = Weight::from_wu(71);
+    let psbt_input = psbt::Input {
+        witness_utxo: Some(witness_utxo),
+        ..Default::default()
+    };
+
+    let mut tx_builder = wallet.build_tx();
+    tx_builder
+        .add_foreign_utxo(outpoint, psbt_input, satisfaction_weight)
+        .unwrap()
+        .only_witness_utxo()
+        .fee_absolute(Amount::from_sat(200))
+        .drain_to(drain_spk);
+
+    let psbt = tx_builder.finish().unwrap();
+    let tx = psbt.unsigned_tx;
+    assert!(tx.input.len() >= 2);
+    assert!(!tx.output.is_empty());
+    assert!(tx.input.iter().any(|txin| txin.previous_output == outpoint));
+}