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Glossary

Contract Execution Transaction (CET)

A pre-signed Bitcoin transaction that executes a specific outcome of a Discreet Log Contract based on the oracle's attestation.

What is Contract Execution Transaction?

A pre-signed Bitcoin transaction that executes a specific outcome of a Discreet Log Contract based on the oracle's attestation. In a Lygos loan, hundreds or thousands of CETs are pre-signed covering every possible BTC price outcome. Each CET specifies exactly how much Bitcoin goes back to the borrower and how much goes to the lender for that price point. This means you can see, before committing any collateral, exactly what happens at every price level throughout your loan term.

Full Definition

A Contract Execution Transaction (CET) is a Bitcoin transaction that has been pre-signed by both parties of a DLC, corresponding to a specific outcome. For each possible outcome (e.g., each price point the oracle might attest to), there is a unique CET that distributes the locked funds accordingly. When the oracle publishes its attestation, the appropriate CET becomes executable. The full set of CETs represents every possible outcome of the contract, all agreed upon and signed before any funds are committed. This is what makes DLCs deterministic. There are no surprise outcomes.

How Lygos Uses This

In a Lygos loan, hundreds or thousands of CETs are pre-signed covering every possible BTC price outcome. Each CET specifies exactly how much Bitcoin goes back to the borrower and how much goes to the lender for that price point. This means you can see, before committing any collateral, exactly what happens at every price level throughout your loan term.

How Lenders Compare

LygosLednNexoUnchained
TechnologyDiscreet Log Contracts (Bitcoin-native)Centralized custodyCentralized custody2-of-3 multisig (manual)
CustodyNon-custodial (DLC)CustodialCustodialCollaborative multisig
Funding SpeedSame day18hr medianInstantNot disclosed
Full comparison

Why this matters for borrowers

Understanding Contract Execution Transaction (CET) is essential for evaluating non-custodial lending. This technology is what makes it possible to borrow against Bitcoin without surrendering your keys to a third party.

Related Terms

Discreet Log Contract (DLC)Adaptor SignatureOracleFunding Transaction

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