Ducat oracle and liquidation

Trace price data into a Bitcoin-enforceable liquidation spend.

Follow these 10 lessons in order, or choose the topic you need. Each lesson combines an explanation, a worked example and practice inside the Guild.

1. How the Ducat oracle works

   Follow one bitcoin price from a signed Chainlink report, through Ducat's precommitted liquidation threshold, to the exact Taproot witness that Bitcoin verifies.

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2. Blind price ladder

   The oracle publishes pre-committed threshold events across collateral-rate buckets so it need not know which users selected which thresholds.

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3. BIP340 commitment hash

   Wallet and oracle compute a tagged commitment over oracle key, network, base price, timestamp, and threshold price.

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4. Nostr transport

   Replaceable signed events distribute current snapshots, threshold contracts, and breach material; relays transport data but are not the trust anchor.

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5. Atomic snapshot promotion

   The current snapshot is published only after its complete ladder succeeds, allowing clients to stay on the prior coherent snapshot after partial failure.

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6. Preimages and Hash160

   A breached threshold reveals secret material whose Hash160 matches the value committed into the vault's liquidation Script leaf.

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7. Liquidation Taproot leaf

   The revealed preimage satisfies the hashlock and a Guardian Schnorr signature satisfies CHECKSIG, making the oracle outcome consumable by Bitcoin Script.

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8. Why the Ducat oracle is Bitcoin-native

   Chainlink supplies authenticated data, but Bitcoin-native enforcement comes from the committed hashlock and signature path inside the Bitcoin UTXO.

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9. Oracle freshness and failure modes

   Stale prices, relay availability, signer rotation, incomplete ladders, configuration drift, and undeployed security fixes must fail closed or be surfaced.

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10. Liquidation cycle

    Detection, preimage release, candidate selection, Guardian validation, repo or trim construction, broadcast, confirmation, and resulting reserve flows form the liquidation lifecycle.

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