diff --git a/lib/core/src/Cardano/Wallet.hs b/lib/core/src/Cardano/Wallet.hs
index f7bc652cf64..2a9c2b3e09d 100644
--- a/lib/core/src/Cardano/Wallet.hs
+++ b/lib/core/src/Cardano/Wallet.hs
@@ -168,6 +168,8 @@ import Data.Text.Class
     ( toText )
 import Data.Time.Clock
     ( diffTimeToPicoseconds, getCurrentTime )
+import Data.Word
+    ( Word16 )
 import Fmt
     ( Buildable, blockListF, pretty, (+|), (+||), (|+), (||+) )
 
@@ -635,10 +637,9 @@ newWalletLayer tracer bp db nw tl = do
                                     Transactions
     ---------------------------------------------------------------------------}
 
-    -- FIXME Compute the options based on the transaction's size / inputs
     coinSelOpts :: CoinSelectionOptions (ErrValidateSelection t)
     coinSelOpts = CoinSelectionOptions
-        { maximumNumberOfInputs = 10
+        { maximumNumberOfInputs = estimateMaxNumberOfInputs tl txMaxSize
         , validate = validateSelection tl
         }
 
diff --git a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection.hs b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection.hs
index 668b9cc46bb..85b4a50a05a 100644
--- a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection.hs
+++ b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection.hs
@@ -34,7 +34,7 @@ import Crypto.Number.Generate
 import Data.Vector.Mutable
     ( IOVector )
 import Data.Word
-    ( Word64 )
+    ( Word64, Word8 )
 import Fmt
     ( Buildable (..), blockListF, blockListF', listF, nameF )
 import GHC.Generics
@@ -80,9 +80,11 @@ instance Buildable CoinSelection where
 
 data CoinSelectionOptions e = CoinSelectionOptions
     { maximumNumberOfInputs
-        :: Word64
+        :: Word8 -> Word8
+            -- ^ Maximum number of inputs allowed for a given number of outputs
     , validate
         :: CoinSelection -> Either e ()
+            -- ^ Returns any backend-specific error regarding coin selection
     } deriving (Generic)
 
 data ErrCoinSelection e
diff --git a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/LargestFirst.hs b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/LargestFirst.hs
index 05fd5501171..29a53d1c0ea 100644
--- a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/LargestFirst.hs
+++ b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/LargestFirst.hs
@@ -46,8 +46,12 @@ largestFirst
     -> ExceptT (ErrCoinSelection e) m (CoinSelection, UTxO)
 largestFirst opt outs utxo = do
     let descending = NE.toList . NE.sortBy (flip $ comparing coin)
-    let n = fromIntegral $ maximumNumberOfInputs opt
-    let nLargest = take n . L.sortBy (flip $ comparing (coin . snd)) . Map.toList . getUTxO
+    let nOuts = fromIntegral $ NE.length outs
+    let maxN = fromIntegral $ maximumNumberOfInputs opt (fromIntegral nOuts)
+    let nLargest = take maxN
+            . L.sortBy (flip $ comparing (coin . snd))
+            . Map.toList
+            . getUTxO
     let guard = except . left ErrInvalidSelection . validate opt
 
     case foldM atLeast (nLargest utxo, mempty) (descending outs) of
@@ -57,7 +61,6 @@ largestFirst opt outs utxo = do
             let moneyRequested = sum $ (getCoin . coin) <$> (descending outs)
             let utxoBalance = fromIntegral $ balance utxo
             let nUtxo = fromIntegral $ L.length $ (Map.toList . getUTxO) utxo
-            let nOuts = fromIntegral $ NE.length outs
 
             when (utxoBalance < moneyRequested)
                 $ throwE $ ErrNotEnoughMoney utxoBalance moneyRequested
@@ -65,10 +68,10 @@ largestFirst opt outs utxo = do
             when (nUtxo < nOuts)
                 $ throwE $ ErrUtxoNotEnoughFragmented nUtxo nOuts
 
-            when (fromIntegral n > nUtxo)
+            when (fromIntegral maxN > nUtxo)
                 $ throwE ErrInputsDepleted
 
-            throwE $ ErrMaximumInputsReached (fromIntegral n)
+            throwE $ ErrMaximumInputsReached (fromIntegral maxN)
 
 -- Selecting coins to cover at least the specified value
 -- The details of the algorithm are following:
diff --git a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/Random.hs b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/Random.hs
index 7f6a4661e01..35baa6764b0 100644
--- a/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/Random.hs
+++ b/lib/core/src/Cardano/Wallet/Primitive/CoinSelection/Random.hs
@@ -116,12 +116,14 @@ random
     -> ExceptT (ErrCoinSelection e) m (CoinSelection, UTxO)
 random opt outs utxo = do
     let descending = NE.toList . NE.sortBy (flip $ comparing coin)
+    let nOuts = fromIntegral $ NE.length outs
+    let maxN = fromIntegral $ maximumNumberOfInputs opt nOuts
     randomMaybe <- lift $ runMaybeT $
-        foldM makeSelection (opt, utxo, []) (descending outs)
+        foldM makeSelection (maxN, utxo, []) (descending outs)
     case randomMaybe of
-        Just (opt', utxo', res) -> do
+        Just (maxN', utxo', res) -> do
             (_, sel, remUtxo) <- lift $
-                foldM improveTxOut (opt', mempty, utxo') (reverse res)
+                foldM improveTxOut (maxN', mempty, utxo') (reverse res)
             guard sel $> (sel, remUtxo)
         Nothing ->
             largestFirst opt outs utxo
@@ -130,14 +132,14 @@ random opt outs utxo = do
 
 -- | Perform a random selection on a given output, without improvement.
 makeSelection
-    :: forall m e. MonadRandom m
-    => (CoinSelectionOptions e, UTxO, [([(TxIn, TxOut)], TxOut)])
+    :: forall m. MonadRandom m
+    => (Word64, UTxO, [([(TxIn, TxOut)], TxOut)])
     -> TxOut
-    -> MaybeT m (CoinSelectionOptions e, UTxO, [([(TxIn, TxOut)], TxOut)])
-makeSelection (CoinSelectionOptions maxNumInputs fn, utxo0, selection) txout = do
+    -> MaybeT m (Word64, UTxO, [([(TxIn, TxOut)], TxOut)])
+makeSelection (maxNumInputs, utxo0, selection) txout = do
     (inps, utxo1) <- coverRandomly ([], utxo0)
     return
-        ( CoinSelectionOptions (maxNumInputs - fromIntegral (L.length inps)) fn
+        ( maxNumInputs - fromIntegral (L.length inps)
         , utxo1
         , (inps, txout) : selection
         )
@@ -156,14 +158,14 @@ makeSelection (CoinSelectionOptions maxNumInputs fn, utxo0, selection) txout = d
 
 -- | Perform an improvement to random selection on a given output.
 improveTxOut
-    :: forall m e. MonadRandom m
-    => (CoinSelectionOptions e, CoinSelection, UTxO)
+    :: forall m. MonadRandom m
+    => (Word64, CoinSelection, UTxO)
     -> ([(TxIn, TxOut)], TxOut)
-    -> m (CoinSelectionOptions e, CoinSelection, UTxO)
-improveTxOut (opt0, selection, utxo0) (inps0, txout) = do
-    (opt, inps, utxo) <- improve (opt0, inps0, utxo0)
+    -> m (Word64, CoinSelection, UTxO)
+improveTxOut (maxN0, selection, utxo0) (inps0, txout) = do
+    (maxN, inps, utxo) <- improve (maxN0, inps0, utxo0)
     return
-        ( opt
+        ( maxN
         , selection <> CoinSelection
             { inputs = inps
             , outputs = [txout]
@@ -175,22 +177,22 @@ improveTxOut (opt0, selection, utxo0) (inps0, txout) = do
     target = mkTargetRange txout
 
     improve
-        :: forall m e. MonadRandom m
-        => (CoinSelectionOptions e, [(TxIn, TxOut)], UTxO)
-        -> m (CoinSelectionOptions e, [(TxIn, TxOut)], UTxO)
-    improve (opt@(CoinSelectionOptions maxN fn), inps, utxo)
+        :: forall m. MonadRandom m
+        => (Word64, [(TxIn, TxOut)], UTxO)
+        -> m (Word64, [(TxIn, TxOut)], UTxO)
+    improve (maxN, inps, utxo)
         | maxN >= 1 && balance' inps < targetAim target = do
             runMaybeT (pickRandomT utxo) >>= \case
                 Nothing ->
-                    return (opt, inps, utxo)
+                    return (maxN, inps, utxo)
                 Just (io, utxo') | isImprovement io inps -> do
                     let inps' = io : inps
-                    let opt' = CoinSelectionOptions (maxN - 1) fn
-                    improve (opt', inps', utxo')
+                    let maxN' = maxN - 1
+                    improve (maxN', inps', utxo')
                 Just _ ->
-                    return (opt, inps, utxo)
+                    return (maxN, inps, utxo)
         | otherwise =
-            return (opt, inps, utxo)
+            return (maxN, inps, utxo)
 
     isImprovement :: (TxIn, TxOut) -> [(TxIn, TxOut)] -> Bool
     isImprovement io selected =
diff --git a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/LargestFirstSpec.hs b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/LargestFirstSpec.hs
index 97016fa59c9..07e7c330480 100644
--- a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/LargestFirstSpec.hs
+++ b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/LargestFirstSpec.hs
@@ -215,7 +215,7 @@ propDeterministic
     :: CoinSelProp
     -> Property
 propDeterministic (CoinSelProp utxo txOuts) = do
-    let opts = CoinSelectionOptions 100 noValidation
+    let opts = CoinSelectionOptions (const 100) noValidation
     let resultOne = runIdentity $ runExceptT $ largestFirst opts txOuts utxo
     let resultTwo = runIdentity $ runExceptT $ largestFirst opts txOuts utxo
     resultOne === resultTwo
@@ -229,7 +229,7 @@ propAtLeast (CoinSelProp utxo txOuts) =
     prop (CoinSelection inps _ _) =
         L.length inps `shouldSatisfy` (>= NE.length txOuts)
     selection = runIdentity $ runExceptT $
-        largestFirst (CoinSelectionOptions 100 noValidation) txOuts utxo
+        largestFirst (CoinSelectionOptions (const 100) noValidation) txOuts utxo
 
 propInputDecreasingOrder
     :: CoinSelProp
@@ -247,4 +247,4 @@ propInputDecreasingOrder (CoinSelProp utxo txOuts) =
             (>= (getExtremumValue L.maximum utxo'))
     getExtremumValue f = f . map (getCoin . coin . snd)
     selection = runIdentity $ runExceptT $
-        largestFirst (CoinSelectionOptions 100 noValidation) txOuts utxo
+        largestFirst (CoinSelectionOptions (const 100) noValidation) txOuts utxo
diff --git a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/RandomSpec.hs b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/RandomSpec.hs
index 23095c80fd2..981d5e96baa 100644
--- a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/RandomSpec.hs
+++ b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelection/RandomSpec.hs
@@ -250,9 +250,10 @@ propFragmentation drg (CoinSelProp utxo txOuts) = do
     prop (CoinSelection inps1 _ _, CoinSelection inps2 _ _) =
         L.length inps1 `shouldSatisfy` (>= L.length inps2)
     (selection1,_) = withDRG drg
-        (runExceptT $ random (CoinSelectionOptions 100 noValidation) txOuts utxo)
+        (runExceptT $ random opt txOuts utxo)
     selection2 = runIdentity $ runExceptT $
-        largestFirst (CoinSelectionOptions 100 noValidation) txOuts utxo
+        largestFirst opt txOuts utxo
+    opt = CoinSelectionOptions (const 100) noValidation
 
 propErrors
     :: SystemDRG
@@ -266,6 +267,7 @@ propErrors drg (CoinSelProp utxo txOuts) = do
     prop (err1, err2) =
         err1 === err2
     (selection1,_) = withDRG drg
-        (runExceptT $ random (CoinSelectionOptions 1 noValidation) txOuts utxo)
+        (runExceptT $ random opt txOuts utxo)
     selection2 = runIdentity $ runExceptT $
-        largestFirst (CoinSelectionOptions 1 noValidation) txOuts utxo
+        largestFirst opt txOuts utxo
+    opt = (CoinSelectionOptions (const 1) noValidation)
diff --git a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelectionSpec.hs b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelectionSpec.hs
index 01439ebc154..88e61c4de1d 100644
--- a/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelectionSpec.hs
+++ b/lib/core/test/unit/Cardano/Wallet/Primitive/CoinSelectionSpec.hs
@@ -133,7 +133,7 @@ instance Buildable CoinSelProp where
 
 -- | A fixture for testing the coin selection
 data CoinSelectionFixture = CoinSelectionFixture
-    { maxNumOfInputs :: Word64
+    { maxNumOfInputs :: Word8
         -- ^ Maximum number of inputs that can be selected
     , validateSelection :: CoinSelection -> Either ErrValidation ()
         -- ^ A extra validation function on the resulting selection
@@ -178,7 +178,7 @@ coinSelectionUnitTest run lbl expected (CoinSelectionFixture n fn utxoF outsF) =
         (utxo,txOuts) <- setup
         result <- runExceptT $ do
             (CoinSelection inps outs chngs, _) <-
-                run (CoinSelectionOptions n fn) txOuts utxo
+                run (CoinSelectionOptions (const n) fn) txOuts utxo
             return $ CoinSelectionResult
                 { rsInputs = map (getCoin . coin . snd) inps
                 , rsChange = map getCoin chngs
diff --git a/lib/core/test/unit/Cardano/Wallet/Primitive/FeeSpec.hs b/lib/core/test/unit/Cardano/Wallet/Primitive/FeeSpec.hs
index 10ad6c909d5..c990e455cd1 100644
--- a/lib/core/test/unit/Cardano/Wallet/Primitive/FeeSpec.hs
+++ b/lib/core/test/unit/Cardano/Wallet/Primitive/FeeSpec.hs
@@ -521,7 +521,7 @@ genTxOut coins = do
 
 genSelection :: NonEmpty TxOut -> Gen CoinSelection
 genSelection outs = do
-    let opts = CS.CoinSelectionOptions 100 (const $ pure ())
+    let opts = CS.CoinSelectionOptions (const 100) (const $ pure ())
     utxo <- vectorOf (NE.length outs * 3) arbitrary >>= genUTxO
     case runIdentity $ runExceptT $ largestFirst opts outs utxo of
         Left _ -> genSelection outs
diff --git a/lib/core/test/unit/Cardano/WalletSpec.hs b/lib/core/test/unit/Cardano/WalletSpec.hs
index 5cad3221c41..eebcb32d182 100644
--- a/lib/core/test/unit/Cardano/WalletSpec.hs
+++ b/lib/core/test/unit/Cardano/WalletSpec.hs
@@ -109,7 +109,7 @@ import Data.Quantity
 import Data.Time.Clock
     ( secondsToDiffTime )
 import Data.Word
-    ( Word32 )
+    ( Word16, Word32 )
 import GHC.Generics
     ( Generic )
 import Test.Hspec
diff --git a/lib/http-bridge/test/unit/Cardano/Wallet/HttpBridge/TransactionSpec.hs b/lib/http-bridge/test/unit/Cardano/Wallet/HttpBridge/TransactionSpec.hs
index 131cb0aa445..0f633fd29d4 100644
--- a/lib/http-bridge/test/unit/Cardano/Wallet/HttpBridge/TransactionSpec.hs
+++ b/lib/http-bridge/test/unit/Cardano/Wallet/HttpBridge/TransactionSpec.hs
@@ -744,7 +744,7 @@ genTxOut coins = do
 
 genSelection :: NonEmpty TxOut -> Gen CoinSelection
 genSelection outs = do
-    let opts = CS.CoinSelectionOptions 100 (const $ Right ())
+    let opts = CS.CoinSelectionOptions (const 100) (const $ Right ())
     utxo <- vectorOf (NE.length outs * 3) arbitrary >>= genUTxO
     case runIdentity $ runExceptT $ largestFirst opts outs utxo of
         Left _ -> genSelection outs
diff --git a/lib/jormungandr/test/unit/Cardano/Wallet/Jormungandr/TransactionSpec.hs b/lib/jormungandr/test/unit/Cardano/Wallet/Jormungandr/TransactionSpec.hs
index 7ed66204812..5bac945ec50 100644
--- a/lib/jormungandr/test/unit/Cardano/Wallet/Jormungandr/TransactionSpec.hs
+++ b/lib/jormungandr/test/unit/Cardano/Wallet/Jormungandr/TransactionSpec.hs
@@ -165,7 +165,7 @@ genTxOut coins = do
 
 genSelection :: NonEmpty TxOut -> Gen CoinSelection
 genSelection outs = do
-    let opts = CS.CoinSelectionOptions 100 (const $ Right ())
+    let opts = CS.CoinSelectionOptions (const 100) (const $ Right ())
     utxo <- vectorOf (NE.length outs * 3) arbitrary >>= genUTxO
     case runIdentity $ runExceptT $ largestFirst opts outs utxo of
         Left _ -> genSelection outs