# Asset Management All stablecoins issued by a Ducat vault must be backed by at least 160% Bitcoin collateral. However, due to limitations in Bitcoin’s current scripting capabilities, this level of collateralisation cannot be enforced purely within Bitcoin itself. ### Limitations of Bitcoin * No transaction introspection: Bitcoin cannot inspect transaction details at execution time, making real-time collateral verification impossible at the base layer. * Lack of complex arithmetic: Opcodes like OP\_MUL and OP\_DIV are not supported, as they were removed by Satoshi alongside other non-standard operations. As a result, the logic required to track the relationship between locked BTC and issued UNIT must be enforced off-chain. ### The MPC System Solution To overcome these limitations, Ducat uses a Multiparty Computation (MPC) system. It is operated by independent participants external to the protocol. Their responsibilities include: * Custodying a share of the FROST key: Each actor holds a portion of the key required to co-sign vault transactions. * Processing user requests: Ensuring that every transaction complies with protocol rules as defined in the Master Canonical Reference Set (CRS). ### The 2-of-2 Multisig Structure All BTC collateral is secured using a 2-of-2 multisig scheme: * Key 1: Held by the user * Key 2: Distributed across the FROST-based MPC network ### Benefits of Scriptless Multisig via FROST * Signer rotation: Participants can be replaced without affecting the validity of previously co-signed transactions * Resilience against malicious actors: Signing power is decentralised across multiple parties * Improved security: The threshold structure ensures that a high number of participants must collude for any compromise to occur This system represents a **significant improvement** over traditional scripted multisigs, offering greater flexibility, security, and resilience. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.ducatprotocol.com/trust-assumptions/asset-management.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.