Indexer

The validation layer is an indexer of UTXOs that keeps track of the movement of both DUCAT and UNIT to ensure that the tokens we are interacting with are not only valid and compliant with ordinal theory but also have been generated according to the set-out protocol rules, like a Bitcoin node.

Ducat and UNIT do not require a validation layer to function. They do, however, strongly benefit from one. Ducat’s validation is subject to a series of indexes that parse UTXO information according to the reconstruction of the protocol rules from an initial transaction ID. This validation layer does not depend on the Ordinal Protocol despite being fully compatible with it.

The indexer is responsible for crawling the Bitcoin blockchain for transactions related to the Ducat Protocol. These transactions fall into two main categories:

1. Ducat Protocol Transactions: Identified by OP_8 in the OP_RETURN output.

2. 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 based on Ducat protocol rules, then 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: Locks BTC in exchange for UNIT.

• Contract Transactions: Defines the variable terms of the protocol.

• Record Transactions: Stores data that is referenced by the contract.

• Proposal Transactions: Proposes changes to the contract.

• Voting Transactions: Uses DUCAT to vote for open proposals.

Security and Trust Model

Unlike traditional validation mechanisms, ordinals do not provide comprehensive validation beyond simple sat indexing. The Ducat Indexer fills this gap by maintaining a detailed ledger of protocol-specific data, ensuring:

• Protocol Compliance: Verifies that transactions align with protocol rules.

• On-Chain Transparency: Allows anyone to audit the system without relying on third parties.

• Decentralization: Users can run their own indexers to cross-verify data, reducing reliance on centralized nodes.

The indexer enhances the robustness of the Ducat Protocol by providing an additional layer of validation and transparency, ensuring that all protocol-related activities comply with the Master Canonical Reference Sat (mCRS)