Ducat Protocol launches the first fully permissionless liquidation system on Bitcoin Layer 1, enabling anyone to liquidate undercollateralised BTC vaults, earn liquidation rewards, and mint UNIT stablecoin — live on testnet from Sept 18th with trustless, Taproot-native enforcement.
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Permissionless BTC liquidations on Layer 1.
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UNIT stablecoin minted by locking BTC in non-custodial vaults.
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$145M testnet BTC vaulted; 2.5M transactions; 60k active users.
Ducat permissionless liquidation on Bitcoin Layer 1 launches Sept 18 — testnet live now. Read how to participate and verify details on en.coinotag.com.
What is Ducat’s permissionless liquidation on Bitcoin?
Ducat permissionless liquidation is a Taproot-native system that lets anyone liquidate undercollateralised BTC-backed vaults on Bitcoin Layer 1. The protocol enforces liquidations via on-chain code and multi-party computation, enabling trustless minting and redemption of the UNIT stablecoin without wrapped tokens or intermediaries.
How does the Ducat liquidation process work?
Ducat users lock BTC in vaults to mint UNIT. If collateral falls below a 135% collateralisation threshold, the vault becomes eligible for liquidation. Any participant can repay the vault debt, buy the BTC at a discount, and claim a liquidation reward. This process is executed natively on Bitcoin using Taproot and multi-party computation.
What are the testnet adoption metrics for Ducat?
Testnet activity provides measurable adoption signals: the network reports $145M in testnet BTC vaulted, $35M in testnet UNIT borrowed, 2.5M transactions and 60k active users. Independent audits and further security reviews are planned before mainnet and governance token launches in Q4 2025.
Why does native Bitcoin liquidation matter?
Native liquidation on Bitcoin removes dependency on bridges, wrapped tokens, or off-chain settlement. That reduces counterparty risk and aligns with Bitcoin’s non-custodial ethos. For markets, it means broader participation, transparent risk management, and programmable enforcement at Layer 1.
Who backs Ducat and what are the next milestones?
Ducat lists support from investors including UTXO Management, Hivemind Capital and CMS Holdings. Mainnet and the protocol governance token are projected for Q4 2025, pending independent audits and security reviews. The team highlights testnet adoption metrics as evidence of product-market fit.
How to participate on testnet?
Developers and users can interact with Ducat on testnet to mint UNIT, open vaults, and run liquidations. All activity is publicly verifiable on-chain. For onboarding and technical resources, consult Ducat’s published white paper and press materials referenced by the project (plain text: White Paper, Twitter/X, Press kit).
Frequently Asked Questions
Can anyone liquidate a Ducat vault?
Yes. The system is permissionless: any participant with the required funds can initiate a liquidation once the vault falls below the 135% collateral threshold and receive the protocol-specified discount and reward.
How is user collateral secured?
Collateral is secured in Taproot-based vault scripts and processed via multi-party computation. Because liquidations and settlements execute on-chain, custody remains non-custodial and enforced by code rather than intermediaries.
Key Takeaways
- Permissionless enforcement: Ducat runs liquidations natively on Bitcoin Layer 1, removing intermediaries.
- UNIT stablecoin: Users mint UNIT by locking BTC; undercollateralised vaults can be liquidated by anyone.
- Measured testnet adoption: $145M testnet BTC vaulted, $35M UNIT borrowed, 2.5M transactions and 60k active users.
Conclusion
Ducat’s launch represents a material step for Bitcoin-native DeFi: a fully permissionless liquidation mechanism that supports a BTC-backed stablecoin and enforces outcomes on-chain. With significant testnet traction and institutional backers, Ducat aims for a Q4 2025 mainnet rollout pending audits. Monitor official Ducat materials and en.coinotag.com for updates and technical documentation.
Publication date: 2025-09-18 | Author: COINOTAG
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