Ark Labs Begins Development of New Bitcoin Layer 2 Payment Network

adminJune 4, 2024

Ark Labs launched a company on Tuesday dedicated to developing a new Bitcoin Layer 2 payment network based on the Ark protocol.

Ark Labs said the Lightning Network, a second-layer solution for payment channels built on top of the Bitcoin blockchain, has helped deliver faster and cheaper payments, but the need to manage channels and liquidity has led many users to opt for managed Lightning. He claims that he chose the wallet. , trading control of your funds for your convenience.

First proposed in 2023, the Ark protocol represents a Bitcoin Layer 2 scaling solution that works alongside the Lightning Network and aims to provide a more simplified user experience while maintaining its own governance.

“Once the contract becomes active on the Bitcoin network, it can provide many good optimizations for Ark users. But you don’t have to wait. Ark is already possible on Bitcoin today.” Ark Labs CEO Marco Argentieri said in a statement shared with The Block. “With the launch of Ark Labs, we can finally make Ark a reality so that users can immediately benefit from seamless, scalable transactions.”

How the Ark Protocol Works

Unlike the Lightning Network, users do not need to manage payment channels or inbound/outbound liquidity to make payments. Users also don’t need to set up their own nodes, and can send and receive self-managed Ark payments with just a lightweight wallet on their smartphone, according to the team.

Ark consists of a network of Ark Service Providers (ASPs) that users can connect to through Ark-compatible wallets. ASPs are trustless servers that issue “virtual transactions” to users when they deposit money. These transactions can be transferred at low cost between users in the same ASP, sent via Lightning to users in another ASP, or redeemed on-chain at any time. Tim said.

“By allowing users to redeem on-chain, they can have the confidence that they have full control of their funds even if the ASP goes offline,” he added. ASPs can collect transaction fees from users making payments within the Ark layer.

Ark Labs is funded by a grant from Vulpem Ventures, a Bitcoin-based financial services company, and is led by a team of experienced Bitcoin developers. Ark Labs will lead the maintenance of the open source implementation of the Ark protocol, which will now allow anyone to build an ASP or Ark-enabled wallet.

Ark Labs says it is already developing several commercial services that leverage the protocol, with the first application expected to launch later this year.

“It is becoming clear that Bitcoin needs more alternatives to scale. We are always on the lookout for future technologies that can enhance Bitcoin services, and Ark is at the top of our list,” said Cory Klippsten, Swan Bitcoin CEO and Ark Labs advisor. “We look forward to finding ways to integrate this to provide more options for efficient deposits, withdrawals and payments.”

Bitcoin Network Transactions at All-Time High

Ark Labs’ launch comes at a time when the seven-day moving average of daily transactions on the Bitcoin network is nearing an all-time high of 720,000, driven by the success of Ordinals and Runes. However, increased transaction volume can lead to congestion delays and increased fees, demonstrating the need for more scalable payment solutions in Bitcoin.

According to The Block’s data dashboard, the Lightning Network is experiencing some strain, but its capacity is currently limited to 5,100 BTC ($350 million).

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adminJune 4, 2024