Ducat is a credit and stablecoin protocol built on top of the Bitcoin base layer. It enables users to borrow against their Bitcoin holdings without having to sell or move it onto another chain.
The protocol uses a unique approach, where loan logic is enforced directly on the Bitcoin blockchain through Taproot vaults and Bitcoin Script. This allows for permissionless liquidations, making it easier for market participants to provide liquidity in case of undercollateralized loans.
According to Ducat's testnet data, more than $700 million in BTC has been locked up and over $300 million in UNIT stablecoins borrowed across approximately 60,000 users. The protocol aims to tap into the vast potential of Bitcoin as collateral, which is currently underutilized with less than 1% of the total supply being active in lending.