DA-01 · LESSON 04

Vault state

KEY DEFINITIONS

Terms used in this lesson

Vault: A set of Bitcoin outputs and spending rules that holds collateral and represents the current loan state.
Collateral: An asset pledged against a debt; it can be used to cover the debt if agreed conditions are breached.
Oracle: A system that reports outside information, such as a market price, for use by a protocol.
UTXO: Unspent transaction output: one discrete chunk of bitcoin that can be used as a transaction input.
Validator: Software or a participant that independently checks state transitions under a system's rules. The exact role depends on the protocol being discussed.
Proof-of-work target: The maximum header-hash value accepted for a block; lowering it makes valid hashes harder to find.
Guardian: A Ducat policy-checking signer that can authorize or reject defined protocol transactions.
BTC: The common market ticker for bitcoin.
UNIT: Ducat’s dollar-pegged stablecoin, the asset a borrower can create against bitcoin collateral.
Outpoint: A transaction ID plus output number that identifies one exact prior output.
Witness: Signatures, scripts, or other data supplied to satisfy a Bitcoin output’s spending condition.

A vault is represented by Bitcoin outputs plus protocol metadata, with each valid action consuming an earlier state and creating its successor.

65 min Difficulty 4/5 Not started

VISUAL MODEL

See the whole mechanism before going step by step

Use the diagrams to orient yourself. Then the guided explanation below teaches every part in depth.

4 explanatory views

CONCEPT-SPECIFIC MAP · ducat vaultA Ducat action moves one Bitcoin-anchored vault state to a successorSelect any state to inspect its exact role.

RELATIONSHIP MAPInputs, rule, and outputs

01
PREDECESSORCurrent vault outpoint
The current Bitcoin output anchors collateral and identifies the state being spent.
02
REQUESTVault state
The Vault state workflow proposes one exact action and successor state.
03
POLICYProfile, oracle, signatures
Applicable policy, price evidence, authorization, and transaction shape are checked.
04
BITCOIN SPENDScript-valid transaction
Bitcoin miners and nodes can include only a transaction that satisfies Bitcoin rules.
05
SUCCESSORNew outpoint and state
Ducat validators reconstruct debt, collateral, token, and account changes from the confirmed transaction.

Rule shown: Bitcoin checks the spend; Ducat components independently reconstruct and validate the additional protocol state.

STAGE 1 OF 5PREDECESSOR: Current vault outpoint

The current Bitcoin output anchors collateral and identifies the state being spent.

Governing relationship: Bitcoin checks the spend; Ducat components independently reconstruct and validate the additional protocol state. Complete path: 1. PREDECESSOR, Current vault outpoint. The current Bitcoin output anchors collateral and identifies the state being spent. 2. REQUEST, Vault state. The Vault state workflow proposes one exact action and successor state. 3. POLICY, Profile, oracle, signatures. Applicable policy, price evidence, authorization, and transaction shape are checked. 4. BITCOIN SPEND, Script-valid transaction. Bitcoin miners and nodes can include only a transaction that satisfies Bitcoin rules. 5. SUCCESSOR, New outpoint and state. Ducat validators reconstruct debt, collateral, token, and account changes from the confirmed transaction.

1. State transitionWhat exists, what changes, and what results

BEFORE

Start with a 75,000,000-sat vault carrying 30,000 UNIT debt. The owner supplies a 15,080,000-sat wallet input; 15,000,000 sats increase collateral, 30,000 sats return as wall…

MECHANISM

The client and validator identify the live vault output and reconstruct its collateral, debt, owner, oracle commitments, and active script paths from the indexed chain state.

AFTER

The new output is the state. Metadata helps describe and index it but does not independently authorize the spend.

Text equivalent: Starting from Start with a 75,000,000-sat vault carrying 30,000 UNIT debt. The owner supplies a 15,080,000-sat wallet input; 15,000,000 sats increase collateral, 30,000 sats return as wallet change, and 50,000 sats pay the fee. This… The mechanism begins when The client and validator identify the live vault output and reconstruct its collateral, debt, owner, oracle commitments, and active script paths from the indexed chain state. The resulting lesson is The new output is the state. Metadata helps describe and index it but does not independently authorize the spend.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 4

Read the current state

The client and validator identify the live vault output and reconstruct its collateral, debt, owner, oracle commitments, and active script paths from the indexed chain state.

Complete path: 1. Read the current state: The client and validator identify the live vault output and reconstruct its collateral, debt, owner, oracle commitments, and active script paths from the indexed chain state. 2. Choose a permitted action: Deposit and withdraw add or remove collateral. Borrow and repay increase or reduce debt. Repo is a full liquidation transaction family that can process eligible vaults. Trim is a partial-liquidation family for one target that preserves a defined continuation output. Each action has different value and authorization rules. 3. Build the state transition: The transaction consumes the prior vault UTXO and creates the next vault output with updated collateral or debt relationships. 4. Validate and authorize: Validators reconstruct state; Guardians check the request and transaction structure before contributing signatures where the path requires them.

3. Rule and failure boundaryWhat accepts the result and where it can stop

ACCEPTED PATH

The current vault and funding outpoints must be live, witnesses must authorize them, 90,080,000 input sats must equal 90,000,000 successor sats plus 30,000 change plus 50,000 fee, and a deposit must preserve 30,000 UNIT debt.

CHANGED CONDITION

A spent vault fails Bitcoin input validation. A Bitcoin-valid successor that changes the debt fails the separate Ducat deposit rule and must not replace the current protocol state.

Important distinction: Changing a vault means editing its stored balance in Ducat’s database. The authoritative transition is a Bitcoin spend from the old output to a new one. Databases reconstruct and serve that history.

Text equivalent: The accepted path is enforced by The current vault and funding outpoints must be live, witnesses must authorize them, 90,080,000 input sats must equal 90,000,000 successor sats plus 30,000 change plus 50,000 fee, and a deposit must preserve 30,000 UNIT debt. If the required condition changes, A spent vault fails Bitcoin input validation. A Bitcoin-valid successor that changes the debt fails the separate Ducat deposit rule and must not replace the current protocol state.

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Learn the idea

A Ducat vault is not a mutable row in a central database. Its current state is represented by Bitcoin outputs plus protocol metadata. An oracle commitment fixes price-linked secret material used by a possible liquidation path. An active script path is one permitted spending condition in the current vault output. Updating the vault means spending the current vault UTXO and creating its successor.

GUIDED EXPLANATION1/4 ideas inspected

Read the current state

The client and validator identify the live vault output and reconstruct its collateral, debt, owner, oracle commitments, and active script paths from the indexed chain state.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“Changing a vault means editing its stored balance in Ducat’s database.”

The authoritative transition is a Bitcoin spend from the old output to a new one. Databases reconstruct and serve that history.

FINISH LEARNING FIRST

The questions unlock after every required learning activity

Inspect every guided idea, open the worked example, rebuild its mechanism, and complete the deterministic lesson tool. Your progress is saved automatically.