A recently revealed Layer 2 protocol called Ark is designed to allow fast and secure transactions. Burak, a Bitcoin developer, introduced Ark as an alternative scaling approach that facilitates sending and receiving funds without liquidity constraints. Unlike Layer 2 protocols such as Lightning, Ark does not require the opening and closing of channels, thereby greatly reducing the on-chain footprint. To transact, the protocol uses virtual UTXOs (vTXOs), which are transient notes that expire after four weeks. The anonymity of coin ownership is enhanced by restricting vTXO values to sat values. Users can also obtain vTXOs from others or through a “lifting” process that removes their on-chain UTXOs off-chain for virtual UTXOs.
Ark also features an intermediary called the Ark Service Provider (ASP), which functions as a liquidity provider, CoinJoin coordinator, and Lightning service provider. ASPs create fast, blinded CoinJoin sessions known as pools every five seconds, ensuring payment schedule atomicity. Recipients can ostensibly claim their funds through a txlock condition that requires an unmodified connector outpoint.
The developer behind Ark posits that the protocol has potential future extensions and improvements. A hypothetical data manipulation opcode, for instance, could discourage double-spending, and users could forge an ASP’s signature to reclaim their vTXOs in the event of a double-spend. Overall, Ark presents an interesting new approach for secure and efficient off-chain transactions on the Bitcoin network.