BTC holders can borrow against native Bitcoin collateral without selling it upfront, wrapping it, bridging it, or handing it to a custodial lender. BTC remains in a Taproot vault on Bitcoin L1. Borrowers can receive UNIT, Ducat's BTC-backed Bitcoin L1 stablecoin, or access another stablecoin through a route that mints UNIT against the vault and swaps it for that stablecoin. The underlying BTC collateral and liquidation mechanism are the same. Both routes incur a 7% upfront minting fee. UNIT proceeds have no ongoing interest. Minimum collateralization is 160%, with liquidation triggered at 135%. That route connects Bitcoin collateral to the wider stablecoin ecosystem while leaving BTC on Bitcoin. Access is currently restricted during alpha. Borrowers must manage collateral health. BTC release follows repayment, required signatures, and Bitcoin confirmation.
Bitcoin L1 credit and stablecoin protocol. Borrow UNIT or other stablecoins against native BTC collateral, without selling, wrapping, or bridging your Bitcoin or handing it to a custodial lender.
Ducat is a credit and monetary system built directly on Bitcoin Layer 1, bringing collateralized vaults, stablecoin issuance, and borrowing into one Bitcoin metaprotocol. It is backed by investors including Hivemind Capital, CMS, and UTXO Management.
BTC holders can access dollar liquidity without selling their Bitcoin upfront or handing it to a custodial lender. Collateral stays as native BTC in Taproot vaults on Bitcoin L1. Borrowing is enforced through Bitcoin Script and required signatures, with loan state recorded in Bitcoin transactions.
UNIT is Ducat's BTC-backed Bitcoin L1 stablecoin. Borrowers can receive UNIT or another stablecoin through a route that mints UNIT against the BTC vault and swaps it. Both routes use the same underlying BTC collateral and liquidation mechanism.
Circle's USDC and wallet infrastructure connect this Bitcoin-native credit system to dollar liquidity and the wider stablecoin ecosystem. The BTC collateral remains on Bitcoin, while USDC delivery and use involve separate infrastructure. This creates opportunities for wallet, payments, off-ramp and liquidity partners to serve Bitcoin holders.
Borrowing terms
- 160% minimum collateralization.
- 135% liquidation threshold.
- 7% upfront minting fee on both routes.
- UNIT proceeds: no ongoing interest.
- At the 135% liquidation threshold, the protocol takes 15% of the entire vault's BTC value.
Ducat uses Chainlink price data and a threshold-signature Guardian network. Repayment and BTC release require the relevant signatures and Bitcoin confirmation. Price monitoring, Guardian availability, market liquidity, and Bitcoin settlement remain operating dependencies.
As of early October 2026, mainnet is in a restricted alpha, with access through Ducat's Discord community and deposits capped.
Use Cases
Liquidators help resolve undercollateralized BTC vaults on Bitcoin L1. The same mechanism applies whether the borrower received UNIT or another stablecoin, because those proceeds are backed by UNIT minted against the vault. At the 135% collateralization trigger, the protocol takes 15% of the entire vault's BTC value. A participant supplies the capital needed to restore the vault, takes over the position, and can repay its UNIT debt to release the BTC. Participants need recapitalization capital, access to UNIT, and the ability to execute the required Bitcoin transactions. Their potential return is the value remaining after the protocol tax, debt repayment, and execution costs. It is not a fixed or guaranteed yield. Price monitoring, Guardian signatures, UNIT liquidity, and Bitcoin confirmation affect execution. Sharp BTC price falls, slippage, and settlement delays can reduce returns or cause losses.
Funds and treasury managers holding BTC can use Ducat to access dollar liquidity for working capital, spending, or investment without selling their Bitcoin upfront or transferring collateral to a custodial lender. Native BTC stays in Taproot vaults on Bitcoin L1. Borrowers can receive UNIT or access another stablecoin through a UNIT mint-and-swap route. Loan state is recorded in Bitcoin transactions and can be independently verified with Ducat's validator tooling. Both routes carry a 7% upfront minting fee. UNIT proceeds have no ongoing interest. The 160% minimum collateral ratio, 135% liquidation trigger, and 15% whole-vault liquidation tax apply to the underlying vault. Treasury teams need to plan collateral buffers, repayment liquidity, and total borrowing costs. Mainnet access remains restricted during alpha.
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