Open Vault
The user deposits Bitcoin and, in return, receives UNIT tokens, with the Bitcoin being locked as collateral in what the protocol defines as a newly created vault. The process takes place in two joint, concurrent transactions. First, the user receives their UNIT tokens. Second, their Bitcoin is moved into a vault, which creates an on-chain record of the vault’s creation.
The user requests an account UTXO from the MPC network. The network assigns a UNIT rune amount, verifies that the required amount of BTC is being deposited, checks the BTC/USD price at the time of the request, and calculates the necessary Bitcoin network fee.
Once these variables are confirmed, the transaction builder constructs a PSBT on the user’s behalf that includes the BTC deposit. The output of the transaction delivers UNIT tokens to the user, assigns the remaining runes to the MPC network’s account UTXO, and stores the user’s collateralised BTC in a designated output.
In a second transaction, the BTC from the previous transaction is deposited into the vault UTXO. This transaction also pays the fees for both transactions, ensuring atomic execution, and generates a vault token to record the vault’s creation for audit and record-keeping purposes.
The vault UTXO, where the BTC collateral is stored, has two spending paths that govern how the BTC can be accessed: one allows the user to update the vault, and the other allows the guardians and oracle to liquidate the vault if the collateralisation ratio falls below the liquidation threshold.
An OP_RETURN vault record tracks the evolution of the user’s borrowing activity and collateralisation history over time.
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