Ducat Node

The validation layer, referred to as the Ducat Node, is a parser and indexer of UTXOs that tracks the movement of both DUCAT and UNIT tokens. Its role is to ensure that the tokens being interacted with are valid, compliant with ordinal theory, and generated according to the rules defined by the protocol, similar to how a Bitcoin node validates transactions.

DUCAT and UNIT do not require a validation layer to function, but they benefit significantly from one. The Ducat Node validates activity by parsing UTXO data in line with the reconstructed protocol rules, starting from an initial transaction ID. This validation process is independent of the Ordinal Protocol but fully compatible with it.

The Ducat Node scans the Bitcoin blockchain for transactions relevant to the Ducat Protocol. These fall into two main categories:

• Ducat Protocol transactions: Identified by OP_8 in the OP_RETURN output

• Rune Protocol transactions: Identified by OP_13 in the OP_RETURN output, filtered by rune_id for DUCAT and UNIT runes

Parsing and Indexing

Transactions are parsed and validated according to Ducat Protocol rules and added to one of the following sub-indexes:

• DUCAT Account UTXOs: Used for issuing DUCAT runes

• DUCAT Spending UTXOs: The primary governance token

• UNIT Account UTXOs: Used for issuing UNIT runes

• UNIT Spending UTXOs: The primary stablecoin token

• Vault transactions: Lock BTC in exchange for UNIT

• Contract transactions: Define the variable terms of the protocol

• Record transactions: Store data that is referenced by contracts

• Proposal transactions: Propose changes to the contract

• Voting transactions: Use DUCAT to vote on open proposals

Security and Trust Model

Ordinal theory does not provide comprehensive validation beyond basic sat indexing. The Ducat Node fills this gap by maintaining a detailed, protocol-specific ledger that ensures:

• Protocol compliance: Verifies that transactions follow all protocol rules

• On-chain transparency: Allows anyone to audit the system independently

• Decentralisation: Users can run their own Ducat Nodes to verify activity and reduce reliance on central infrastructure

The Ducat Node strengthens the integrity of the protocol by adding a layer of validation and transparency. It ensures that all protocol-related activity conforms to the Master Canonical Reference Sat (mCRS).