DA-02 · LESSON 01

What UNIT represents

KEY DEFINITIONS

Terms used in this lesson

UNIT: Ducat’s dollar-pegged stablecoin, the asset a borrower can create against bitcoin collateral.
Collateral: An asset pledged against a debt; it can be used to cover the debt if agreed conditions are breached.
BTC: The common market ticker for bitcoin.
Vault: A set of Bitcoin outputs and spending rules that holds collateral and represents the current loan state.
Proof-of-work target: The maximum header-hash value accepted for a block; lowering it makes valid hashes harder to find.
Runes: A Bitcoin metaprotocol that assigns fungible-token meaning to transaction outputs through off-chain interpretation.
UTXO: Unspent transaction output: one discrete chunk of bitcoin that can be used as a transaction input.

UNIT is Ducat's issued asset; its token movements and its relationship to bitcoin collateral must be distinguished from the BTC locked in vault outputs.

35 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
REQUESTWhat UNIT represents
The What UNIT represents 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, What UNIT represents. The What UNIT represents 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

Follow one borrower, one recipient, and one vault through a vector that differs from required practice.

MECHANISM

A Rune-compatible transaction allocates UNIT to specified Bitcoin outputs.

AFTER

UNIT is one output of a wider lending system. Owning UNIT is not the same as owning a vault, and transferring UNIT is not the same as repaying debt.

Text equivalent: Starting from Follow one borrower, one recipient, and one vault through a vector that differs from required practice. The mechanism begins when A Rune-compatible transaction allocates UNIT to specified Bitcoin outputs. The resulting lesson is UNIT is one output of a wider lending system. Owning UNIT is not the same as owning a vault, and transferring UNIT is not the same as repaying debt.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 4

Create token state

A Rune-compatible transaction allocates UNIT to specified Bitcoin outputs.

Complete path: 1. Create token state: A Rune-compatible transaction allocates UNIT to specified Bitcoin outputs. 2. Create debt state: A borrow action increases a named vault's debt while the related issue transaction releases UNIT. 3. Move them independently: The borrower may transfer UNIT outputs without moving the locked collateral UTXO or changing its debt. 4. Reconcile at protocol actions: Borrow and repay connect issuance or burning to the matching debt differential even though token and vault states remain separate.

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

ACCEPTED PATH

The worked case executes the named inputs and checks in the displayed order. Borrow and repay connect issuance or burning to the matching debt differential even though token and vault states remain separate.

CHANGED CONDITION

A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. UNIT is a transferable issued asset. Vault collateral follows its own committed spending paths and debt rules.

Important distinction: UNIT is a claim to spend a particular vault's bitcoin. UNIT is a transferable issued asset. Vault collateral follows its own committed spending paths and debt rules.

Text equivalent: The accepted path is enforced by The worked case executes the named inputs and checks in the displayed order. Borrow and repay connect issuance or burning to the matching debt differential even though token and vault states remain separate. If the required condition changes, A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. UNIT is a transferable issued asset. Vault collateral follows its own committed spending paths and debt rules.

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Learn the idea

UNIT is Ducat's intended dollar-pegged asset. A peg is a design target that aims for one UNIT to track one United States dollar, not a guarantee that market price will always equal one dollar. A Rune is a token whose amounts are reconstructed from Bitcoin transactions by compatible indexers. An indexer is software that scans Bitcoin transactions in chain order and applies external Runes rules to derive token balances. A vault is a Bitcoin output representing locked bitcoin collateral and UNIT-denominated debt. UNIT ownership and vault debt are separate states.

GUIDED EXPLANATION1/4 ideas inspected

Create token state

A Rune-compatible transaction allocates UNIT to specified Bitcoin outputs.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“UNIT is a claim to spend a particular vault's bitcoin.”

UNIT is a transferable issued asset. Vault collateral follows its own committed spending paths and debt rules.

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.