Why does the Kaspa wallet daemon require the --utxoindex parameter on the node?

The wallet daemon will refuse to start and show an error if your Kaspa node is not running with the --utxoindex parameter. The UTXO index is a data structure the node maintains to track which coins belong to which addresses; the wallet daemon depends on this index to look up your balance and process transactions. If you launched your node without that flag, you need to restart it and add --utxoindex to the command line before bringing the daemon up. For a beginner, the practical takeaway is: double-check your node's startup command includes --utxoindex, or the wallet setup will stall at this step.