# Architecture

The Ducat protocol architecture can be broken down into the following diagram that show cases the steps that happen when a user attempts to borrow UNIT.

<figure><img src="/files/zuf3f0W9RryAodalQhVu" alt=""><figcaption><p>Architecture Diagram</p></figcaption></figure>

{% hint style="info" %}
The Guardian network does not, in any way, custody or control the user’s collateralised BTC, it simply acts as a backstop mechanism to ensure protocol rules are being followed.
{% endhint %}

The MPC network acts as a distributed co-signer, designed to solve the liveness problem of a purely peer-to-peer network.

It validates transactions for vault operations, co-signs outputs alongside user signatures, manages Rune distributions between network and user UTXOs, verifies that collateral ratios remain above agreed thresholds, ensures the burning of repaid UNIT tokens, and enforces transaction ordering and compliance with protocol standards.

In the future, updates to Bitcoin such as OP\_CHECKTEMPLATEVERIFY (CTV), OP\_CHECKSIGFROMSTACK (CSFS), or OP\_CAT could allow Ducat to operate without a guardian network. These changes would make it possible to enforce vault rules and transaction constraints directly in Bitcoin Script, removing the need for off-chain validation and threshold signatures. While these upgrades are not guaranteed, they illustrate a path toward a fully trust-minimised, peer-to-peer version of the protocol.


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