The Ark Protocol: Bitcoin's Next Scaling Layer

The Ark protocol lets many users share a single Bitcoin output on the blockchain while each of them keeps their own bitcoin. Instead of opening channels as with Lightning, you receive so-called virtual outputs (VTXOs) from an operator, which you can take onto the blockchain yourself at any time. Payments are bundled in regular rounds. The developer Burak Keceli presented Ark in May 2023. As of November 2026, two implementations run on mainnet: Arkade by Ark Labs and bark by Second, both still young.

Why Bitcoin needs another layer

The blockchain handles a few thousand transactions per block. If hundreds of millions of people each wanted their own output, the space would not even suffice to give everyone one once in their life. Fees rise when many bid for the space. How that works is explained in the article on transaction fees.

The Lightning Network solves part of it: payments run off the blockchain through channels. But every channel needs its own transaction to open and close, and anyone who wants to receive needs inbound liquidity. That is why many people use Lightning through custodial wallets, where a provider holds the keys.

Ark wants to open a path in between: your own keys, your own exit to the blockchain, but no channels of your own, and a share of a common output instead of an output of your own.

How Ark works: operator, VTXOs and rounds

The operator

An Ark has an operator (formerly called an Ark Service Provider). It runs a server, coordinates the rounds and provides capital. It cannot spend your bitcoin without you, but it can refuse to let you take part in rounds. Then you still have the exit to the blockchain.

VTXOs: virtual outputs

A normal Bitcoin output (UTXO) sits in the blockchain. A VTXO is an output that is not there yet but can get there at any time. For it you hold a chain of transactions that all parties signed in advance. If you broadcast them, a normal output on your address appears at the end.

So that hundreds of users fit into a single output, these transactions are arranged as a tree. The shared output on the blockchain is the trunk. The first pre-signed transaction splits it into two branches, each branch again into two, until every leaf is a single VTXO. For your exit you only need the transactions on the way from the trunk to your leaf.

Rounds

At regular intervals the operator starts a round. Anyone who wants to pay or renew a VTXO signs up. In plain words:

1. You tell the operator: "I am handing in my old VTXO and want a new one for me and one for Anna."
2. The operator builds a new shared transaction for all participants of this round, with a new tree.
3. The participants' new tree is signed. Only then do you sign that your old VTXO goes to the operator, and only on the condition that the new round actually lands on the blockchain.
4. The round transaction is broadcast. You now hold a fresh VTXO, and so does Anna.

The operator puts its own money into the round for the new VTXOs. It gets the handed-in old VTXOs back only when they expire. This locked capital is its main cost and the reason for its fees.

The expiry date: why VTXOs expire

So that the operator does not lock up its capital forever, every round's tree has an expiry date, typically a few weeks. After that the operator can sweep the entire shared output on its own. Whoever has neither renewed nor withdrawn their VTXO by then loses it to the operator.

That sounds harsh, and it is the most important difference from a normal wallet. In practice the Ark wallet renews your VTXOs automatically in a round before they expire. That costs a small fee and requires your app to check in regularly.

Whom you trust with Ark

Ark is often described as "self-custody without channels". That is true with caveats.

What the operator cannot do: it cannot spend your VTXO. It cannot take it away from you as long as you act before expiry. If it refuses to let you into a round or disappears, you broadcast your path and take your bitcoin onto the blockchain.

What you still need: your app has to be online before expiry. And the exit has to be worth it, so your VTXO has to be large enough.

Payments between rounds: so that nobody has to wait for the next round, the implementations also allow instant payments between rounds. The names differ, the principle is the same: the recipient gets a VTXO immediately but, until the next round, trusts that sender and operator will not cheat together. Only once it is renewed in a round is it fully secured.

Privacy: in a round many payments mix. On the blockchain only one shared transaction is visible. The operator, however, depending on the implementation, knows more about the payments than a single Lightning node along a route.

Ark, Lightning and Fedimint compared

A federation with shared custody is described in the article on Fedimint. Ark and Lightning do not exclude each other: the implementations connect Ark to Lightning, so you can pay Lightning invoices from an Ark wallet.

Implementations: Ark Labs and Second (as of November 2026)

Burak Keceli presented Ark in May 2023 on the Bitcoin developers' mailing list. Ark works without new rules in Bitcoin, but would be much simpler and more efficient with covenants. Two teams have since built their own implementations.

Ark Labs develops the server arkd and, on top of it, Arkade. In November 2025 Arkade launched on Bitcoin mainnet, with developer toolkits in several programming languages, a wallet and a plugin for the payment server BTCPay Server that lets merchants accept Ark payments.

Second was founded by the former Blockstream developer Steven Roose and develops bark, an Ark implementation with built-in Lightning support. Bark ran on the Signet test network from March 2025 and has run on mainnet since June 2026, with a public Ark server. Since February 2026 Second has used a variant called hArk (hash-lock Ark): users no longer have to be online at the same time and co-sign during a round, at the price of other trade-offs.

Both projects are open source. As of November 2026 they are young, few wallets support Ark, and the software still changes with versions that do not always understand older ones. If you want to try Ark, start with money you can afford to lose.

What covenants would change for Ark

Without new rules in Bitcoin, a round's tree has to be signed in advance. In the original form all participants sign together, which requires everyone in the round to be online and take part. If one drops out, the round has to be rebuilt without them. Variants such as hArk shift this burden, but only with other trade-offs.

With a covenant such as OP_CHECKTEMPLATEVERIFY, the shared output itself could define which branches it may split into. Then nobody would have to pre-sign the tree. Recipients could even receive payments in a round without being online themselves. What CTV and other proposals do exactly and how far the debate has come is explained in the article on covenants. How Bitcoin gets such new rules at all is in Bitcoin soft fork explained.