Ducat Protocol is developing a Bitcoin-native stablecoin, UNIT, that allows users to borrow against their BTC collateral in a non-custodial manner. This approach addresses the volatility of Bitcoin by providing a stable asset for transactions within the BTC-Fi ecosystem, enabling users to leverage their holdings without selling them.
Funding
Funding not disclosed
Founders
Product
Problem
Bitcoin's inherent price volatility limits its utility for everyday transactions and decentralized finance (DeFi) applications. Users who want to leverage their Bitcoin holdings often face the dilemma of selling their BTC, incurring potential tax implications and missing out on future appreciation.
Solution
Ducat Protocol introduces UNIT, a Bitcoin Layer 1-native stablecoin that allows users to borrow against their BTC holdings without relinquishing custody. Users deposit BTC into vaults and borrow UNIT, maintaining exposure to Bitcoin while accessing a stable asset for use within the BTC-Fi ecosystem. The protocol employs a risk-based borrowing system, enabling users to set collateralization ratios based on their risk tolerance. A comprehensive dashboard provides real-time BTC price updates and a dynamic risk indicator to help users manage their vault health and avoid liquidation.
Target Audience
The primary audience includes Bitcoin holders seeking to leverage their assets for DeFi activities, as well as liquidators interested in earning yield by recapitalizing undercollateralized vaults.
Features
- Non-custodial vaults that allow users to deposit BTC and borrow UNIT
- Risk-based borrowing with flexible collateralization ratios
- Real-time monitoring of vault health with dynamic risk indicators
- Secure Bitcoin transaction execution via the Ducat SDK, ensuring permissionless BTC redemption
- Transparent and auditable protocol with on-chain data
- Liquidation mechanism that allows liquidators to recapitalize distressed vaults and maintain UNIT's peg
- Compatibility with Runes tokens and wallets like Leather