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Bitcoin Layer 2: Ark
- Ark is an off-chain transaction batching mechanism proposed by a Turkish developer, Burak, and has two implementations by Ark Labs and Second.
- The original Ark proposal focused more on privacy and initially required CHECKTEMPLATEVERIFY (CTV).
- Ark relies on a central coordinating server but offers functionality and security similar to the Lightning Network.
- Unlike Lightning, Ark does not require pre-allocated liquidity for users to receive funds.
- Ark coins are Virtual UTXOs (vUTXOs) held offchain in a pre-signed transaction tree facilitated by the Ark Service Provider (ASP).
- Transactions on Ark include out-of-round transfers and in-round transfers, each with unique security implications.
- To finalize transactions, users engage in batch swaps using a connector input to ensure atomic guarantees.
- ASP provides liquidity for batch creation, impacting blockspace use and throughput limits on the Ark protocol.
- Ark offers efficiency benefits for off-chain transactions but has a throughput limit tied to blockchain throughput.
- Ark complements the Lightning Network and can interoperate with it, presenting valuable trade-offs in the Bitcoin ecosystem.
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