Ducat Protocol

Ducat Protocol is a Bitcoin-native credit and stablecoin protocol that lets BTC holders borrow against their bitcoin without giving up custody. Users lock BTC in Taproot vaults on Bitcoin layer one and borrow UNIT, a dollar-pegged stablecoin issued as a Rune, or USDC, with no L2s, bridges or wrapped tokens involved. The team is remote-first and the project is in a closed mainnet alpha.

Each vault is a 2-of-2 Taproot multisig: the borrower holds one key and a Guardian network, described as an 11-of-15 FROST threshold signing group, holds the other. Vault creation, liquidation and redemption logic is enforced by Bitcoin Script, and validators rebuild protocol state by reading OP_RETURN data without any signing power. The site says Ducat has no admin keys and cannot freeze vaults or redirect BTC. Borrowers choose their own collateral ratio, with a stated 160% minimum, up to 62.5% loan-to-value, and repay the debt to redeem their BTC in a single Bitcoin block.

• UNIT: a Runes stablecoin backed by overcollateralized BTC, with a stated soft-peg range of $1.01 to $1.04
• USDC borrowing: UNIT converted 1:1 to USDC through the Circle SDK
• Fee model: 0% ongoing interest and a one-time 7% minting charge
• Liquidations: vaults below 135% collateralization can be liquidated by buyers of discounted BTC, requiring a Chainlink oracle attestation plus a Guardian check against a secondary price feed
• Rust SDK: builds BTC transactions locally, manages positions, monitors collateral ratios and automates redemptions
• Open source front end: published code with community mirrors

For institutions, onboarding runs in four steps: a roughly 30-minute technical assessment, SDK integration, testnet validation and mainnet go-live, with the institution keeping control of its own key material. Chainlink is the official oracle partner, with a custom Bitcoin integration.

According to its website, Ducat raised $4 million in total, announced in May 2025, with UTXO Management leading the pre-seed round and Hivemind Capital leading the strategic round, and CMS and NATIVE (via Echo) also taking part. Co-founders are David Evans (CEO), Alex Forshaw (CPO) and Lucas Rodriguez Benitez (CTO). The project reports multiple internal audits complete and external audits in progress, and describes itself as experimental software that carries risk, including potential loss of funds.