A major milestone in Bitcoin finance launches Sept 18th.
Ducat Protocol has unveiled the first fully permissionless liquidation system built directly on Bitcoin Layer 1. The protocol allows anyone to liquidate undercollateralised vaults and earn a return for stabilising the peg and protocol. It’s not just a concept, it is already live on testnet.
Unlike Layer 2s, rollups or bridge-based systems, Ducat runs natively on Bitcoin. Using Taproot and multi-party computation, it delivers something never before achieved: decentralised liquidations enforced entirely by code.
“It is not just a technical breakthrough, it is a paradigm shift for global financial markets,” said David Evans, Co-Founder of Ducat. “Liquidations on Bitcoin mean equal access to credit, fair risk management, and open participation in financial markets for anyone, anywhere.”
With Ducat, users mint UNIT, a Bitcoin-backed stablecoin, by locking BTC in vaults. If the value of the collateral falls below 135 per cent of the debt, the vault becomes eligible for liquidation. Anyone can liquidate the vault, repay the debt and buy the BTC at a discount. It is completely permissionless.
Ducat eliminates wrapped tokens, intermediaries and off-chain settlement. The system is secure, trustless and non-custodial, aligning with Bitcoin’s core principles while enabling a new class of open source financial infrastructure.
Testnet Adoption
$145M in testnet BTC vaulted
$35M in testnet UNIT borrowed
2.5M transactions
60k active users
Ducat is backed by leading investors including UTXO Management, Hivemind Capital and CMS Holdings and is already partnered with a growing network of payment and De-Fi projects.
Mainnet and Ducat’s governance token launch are expected in Q4 2025 following independent audits. The liquidation system is fully operational on testnet *Sept 18th
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This article was originally published as Launch Sept 18 Bitcoin Liquidations Go Permissionless: Ducat Launches First Bitcoin Layer 1 Liquidation Protocol on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.
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