DA-03 · LESSON 03

Borrow and repay

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.
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.
Runestone: Transaction data interpreted by the Runes protocol to describe token creation or allocation.

Issuance or burn activity is paired with a vault state update so UNIT changes reconcile with the vault differential.

55 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
REQUESTBorrow and repay
The Borrow and repay 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, Borrow and repay. The Borrow and repay 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

Begin with 30,000 UNIT debt and a separate collateral fixture. Required practice uses different debt and burn amounts.

MECHANISM

Both actions spend the live vault output and must preserve its identity and authorized successor structure.

AFTER

A failed repay leaves the 34,000-debt borrow successor authoritative; burning all 34,000 reaches the separately defined closure boundary. Required practice uses a separate se…

Text equivalent: Starting from Begin with 30,000 UNIT debt and a separate collateral fixture. Required practice uses different debt and burn amounts. The mechanism begins when Both actions spend the live vault output and must preserve its identity and authorized successor structure. The resulting lesson is A failed repay leaves the 34,000-debt borrow successor authoritative; burning all 34,000 reaches the separately defined closure boundary. Required practice uses a separate server-executed vector.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 4

Select the current vault

Both actions spend the live vault output and must preserve its identity and authorized successor structure.

Complete path: 1. Select the current vault: Both actions spend the live vault output and must preserve its identity and authorized successor structure. 2. Build the token parent: Borrow issues UNIT from an account; repay creates a burn allocation from UNIT-bearing inputs. 3. Build the vault child: The successor debt increases for borrow or decreases for repay by the validated amount. 4. Check policy and package: The pair must satisfy debt, collateral, runestone, signature, fee, and dependency checks before broadcast.

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. The pair must satisfy debt, collateral, runestone, signature, fee, and dependency checks before broadcast.

CHANGED CONDITION

A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. Repay is a structured burn plus successor-vault transition, not an ordinary token transfer to an address.

Important distinction: Repaying means sending UNIT to the vault's Bitcoin address. Repay is a structured burn plus successor-vault transition, not an ordinary token transfer to an address.

Text equivalent: The accepted path is enforced by The worked case executes the named inputs and checks in the displayed order. The pair must satisfy debt, collateral, runestone, signature, fee, and dependency checks before broadcast. If the required condition changes, A missing, malformed, stale, unauthorized, or inconsistent required input stops at its first named boundary. Repay is a structured burn plus successor-vault transition, not an ordinary token transfer to an address.

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Learn the idea

Borrow increases vault debt and releases UNIT. Repay burns UNIT and decreases debt. The captured design uses paired token and vault transactions so the two changes can be reconciled.

GUIDED EXPLANATION1/4 ideas inspected

Select the current vault

Both actions spend the live vault output and must preserve its identity and authorized successor structure.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“Repaying means sending UNIT to the vault's Bitcoin address.”

Repay is a structured burn plus successor-vault transition, not an ordinary token transfer to an address.

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.