diff --git a/chain/store/splitstore.go b/chain/store/splitstore.go
index a069b28fd..01bb4574c 100644
--- a/chain/store/splitstore.go
+++ b/chain/store/splitstore.go
@@ -31,7 +31,6 @@ type SplitStore struct {
 	cold bstore2.Blockstore
 
 	snoop TrackingStore
-	sweep TrackingStore
 
 	compacting bool
 }
@@ -41,10 +40,15 @@ type TrackingStore interface {
 	PutBatch([]cid.Cid, abi.ChainEpoch) error
 	Get(cid.Cid) (abi.ChainEpoch, error)
 	Delete(cid.Cid) error
-	Has(cid.Cid) (bool, error)
 	Keys() (<-chan cid.Cid, error)
 }
 
+type LiveSet interface {
+	Mark(cid.Cid) error
+	Has(cid.Cid) (bool, error)
+	Close() error
+}
+
 var _ bstore2.Blockstore = (*SplitStore)(nil)
 
 // Blockstore interface
@@ -219,12 +223,29 @@ func (s *SplitStore) HeadChange(revert, apply []*types.TipSet) error {
 
 // Compaction/GC Algorithm
 func (s *SplitStore) compact() {
-	// Phase 1: mark all reachable CIDs with the current epoch
+	// create two on disk live sets, one for marking the cold finality region
+	// and one for marking the hot region
+	hotSet, err := s.newLiveSet()
+	if err != nil {
+		// TODO do something better here
+		panic(err)
+	}
+	defer hotSet.Close() //nolint:errcheck
+
+	coldSet, err := s.newLiveSet()
+	if err != nil {
+		// TODO do something better here
+		panic(err)
+	}
+	defer coldSet.Close() //nolint:errcheck
+
+	// Phase 1a: mark all reachable CIDs in the hot range
 	curTs := s.curTs
 	epoch := curTs.Height()
-	err := s.cs.WalkSnapshot(context.Background(), curTs, epoch-s.baseEpoch+1, false, false,
+	coldEpoch := s.baseEpoch + build.Finality
+	err = s.cs.WalkSnapshot(context.Background(), curTs, epoch-coldEpoch+1, false, false,
 		func(cid cid.Cid) error {
-			return s.sweep.Put(cid, epoch)
+			return hotSet.Mark(cid)
 		})
 
 	if err != nil {
@@ -232,9 +253,27 @@ func (s *SplitStore) compact() {
 		panic(err)
 	}
 
-	// Phase 2: sweep cold objects, moving reachable ones to the coldstore and deleting the others
-	coldEpoch := s.baseEpoch + build.Finality
+	// Phase 1b: mark all reachable CIDs in the cold range
+	coldTs, err := s.cs.GetTipsetByHeight(context.Background(), coldEpoch-1, curTs, true)
+	if err != nil {
+		// TODO do something better here
+		panic(err)
+	}
 
+	err = s.cs.WalkSnapshot(context.Background(), coldTs, build.Finality, false, false,
+		func(cid cid.Cid) error {
+			return coldSet.Mark(cid)
+		})
+
+	if err != nil {
+		// TODO do something better here
+		panic(err)
+	}
+
+	// Phase 2: sweep cold objects:
+	// - If a cold object is reachable in the hot range, it stays in the hotstore.
+	// - If a cold object is reachable in the cold range, it is moved to the coldstore.
+	// - If a cold object is unreachable, it is deleted.
 	ch, err := s.snoop.Keys()
 	if err != nil {
 		// TODO do something better here
@@ -250,24 +289,31 @@ func (s *SplitStore) compact() {
 
 		// is the object stil hot?
 		if wrEpoch >= coldEpoch {
-			// yes, just clear the mark and continue
-			err := s.sweep.Delete(cid)
-			if err != nil {
-				// TODO do something better here
-				panic(err)
-			}
+			// yes, stay in the hotstore
 			continue
 		}
 
-		// the object is cold -- check whether it is reachable
-		mark, err := s.sweep.Has(cid)
+		// the object is cold -- check whether it is reachable in the hot range
+		mark, err := hotSet.Has(cid)
 		if err != nil {
 			// TODO do something better here
 			panic(err)
 		}
 
 		if mark {
-			// the object is reachable, move it to the cold store and delete the mark
+			// the object is reachable in the hot range, stay in the hotstore
+			continue
+		}
+
+		// check whether it is reachable in the cold range
+		mark, err = coldSet.Has(cid)
+		if err != nil {
+			// TODO do something better here
+			panic(err)
+		}
+
+		if mark {
+			// the object is reachable in the cold range, move it to the cold store
 			blk, err := s.hot.Get(cid)
 			if err != nil {
 				// TODO do something better here
@@ -279,12 +325,6 @@ func (s *SplitStore) compact() {
 				// TODO do something better here
 				panic(err)
 			}
-
-			err = s.sweep.Delete(cid)
-			if err != nil {
-				// TODO do something better here
-				panic(err)
-			}
 		}
 
 		// delete the object from the hotstore
@@ -302,21 +342,6 @@ func (s *SplitStore) compact() {
 		}
 	}
 
-	// clear all remaining marks for cold objects that may have been reachable
-	ch, err = s.sweep.Keys()
-	if err != nil {
-		// TODO do something better here
-		panic(err)
-	}
-
-	for cid := range ch {
-		err = s.sweep.Delete(cid)
-		if err != nil {
-			// TODO do something better here
-			panic(err)
-		}
-	}
-
 	err = s.setBaseEpoch(coldEpoch)
 	if err != nil {
 		// TODO do something better here
@@ -332,3 +357,8 @@ func (s *SplitStore) setBaseEpoch(epoch abi.ChainEpoch) error {
 	bs = bs[:n]
 	return s.ds.Put(baseEpochKey, bs)
 }
+
+func (s *SplitStore) newLiveSet() (LiveSet, error) {
+	// TODO implementation
+	return nil, errors.New("newLiveSet: IMPLEMENT ME!!!")
+}