Ark Labs is a private company founded in June 2024 by Marco Argentieri and Simone Giacomelli. The company is based in Europe and aims to help people use Bitcoin cheaply, easily, and privately. Ark Labs has developed the open-source Bitcoin layer 2 protocol Ark, which enables users to amortize the cost of a single on-chain transaction across many off-chain swaps.
The Ark protocol aims to address the liquidity constraints of Lightning, another popular Bitcoin scale solution. Ark provides and sources the liquidity for transactions it facilitates via its servers, rather than relying on peers for liquidity as Lightning does. This decentralized system allows users to receive funds off-chain in vTXOs (Virtual Transaction Outputs), which alleviates the need to open a channel and/or receive inbound liquidity.
The company aims to make Bitcoin usage more accessible and user-friendly for the average person. Argentieri believes that, just as most people didn’t want to deal with using Bitcoin for remittance payments 10 years ago, they don’t want to become experts in running Lightning nodes to make payments these days.
Ark Labs seeks to provide a more accessible solution that assumes not everyone is a peer in the process. The protocol starts by acknowledging that there will be specialized people or specialized enterprises that know how to handle liquidity, which are referred to as Ark servers. Clients, or people who only want to send or receive a payment, can use the Ark protocol without having to get into all the complexity.
Ark Labs acknowledges that its centralized design may not be philosophically flawless, but it is effective in providing a user experience that looks like Bitcoin on-chain. To obtain liquidity for Ark servers, UTXO owners can serve as liquidity providers, which Argentieri sees as an opportunity, especially for those in the West.
To both obtain liquidity for Ark servers and quench Westerners’ thirst for yield, those willing can become liquidity providers to Ark in exchange for a small fee. This allows for a Bitcoin interest rate, which Argentieri sees as a discovery mechanism for a true native interest rate for Bitcoin. Ark Labs aims to help scale Bitcoin horizontally, rather than vertically like Lightning.
With Ark, a UTXO can provide liquidity for an exponential number of transactions compared to the amount of funds in the UTXO. It allows for more transactions and is usable in many of the ways that Bitcoin itself is usable. The company is currently working on bringing Sheet Node to market, a B2B enterprise-grade offering that is a “plugin for your LND node” to help businesses with rebalancing liquidity.
They also announced a partnership with Boltz to enable off-chain Lightning liquidity management, aiming to make swaps faster, cheaper, and easier via the Ark Node. In conclusion, Ark Labs is focused on making Bitcoin more accessible and user-friendly for the average person by providing a decentralized, scalable, and secure solution for Bitcoin transactions.
The company’s advancements aim to improve the Bitcoin ecosystem and make Bitcoin payments better in the future.
