That's a very cute-sized Dutch oven! You're welcome to use it to bake bread in as long as you start with the right amount of dough. Try using a scant 1-pound of dough initially to see how you like the results (or maybe even 3/4 of a pound of dough for your first try). And yes, you're more than welcome to use the parchment paper as a "sling" to transfer the dough to the pot before baking. The reason why we don't recommend this outright is because the parchment can cause the loaf to be slightly misshaped, but if you're not keen on a perfect round, use that parchment paper sling technique. Happy baking!

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