Ark is a newly proposed layer two protocol that aims to enable the ability to make cheap off-chain transactions while not suffering from the same adoption difficulties as the Lightning Network: inbound liquidity and channel management. It relies on a central service provider to condense an unlimited number of transactions of so-called virtual UTXOs (VTXOs) that happen off-chain into a single on-chain transaction. Because Ark is inter-operable with the Lightning Network, Ark users can also send and receive Lightning payments.

Ark is currently still in design phase and no specification or implementation exists to date.

Technical Requirements

In theory it is possible to build Ark on Bitcoin without covenants, but with the use of transaction templating, the protocol becomes a lot less interactive.

Herefore, ideally Ark would be built on some transaction templating mechanism. It would be possible to use CTV, but ideally something more flexible like TXHASH would be preferred.

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