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Bitcoin Layer 2 Ark Protocol's Team Forms New Firm as Lightning Network Competitor
Layer-2 protocol Ark is built to allow off-chain payments in a way that avoids what creator Burak Kecli referred to as "inbound liquidity" problem of Lightning.
Updated Jun 4, 2024, 1:00 p.m. Published Jun 4, 2024, 1:00 p.m.
- Ark Labs has been established to respond to the need for scalable, low-cost bitcoin payments.
- Ark's creator Burak Keceli has moved on to other things, but the protocol and now Ark Labs is continuing to pursue the goal of building on and enhancing what Lightning has brought to Bitcoin.
The team behind Bitcoin layer-2 protocol Ark has formed a new company that will build a faster, cheaper payments system on the world's largest blockchain, aiming to create a better venue than Lightning Network.
The new firm, Ark Labs, was established to respond to the need for scalable, low-cost bitcoin payments, according to an emailed announcement on Tuesday.
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The two primary objectives of the new company are to develop an open implementation of the Ark Protocol and build services for users, the first of which is expected later this year.
Layer-2 protocol Ark is built to allow off-chain payments in a way that avoids what creator Burak Kecli referred to as the "inbound liquidity" problem of Lightning.
“Lightning has many problems. But number one to me is the inbound liquidity problem,” Keceli told CoinDesk in an interview a year ago. “Imagine a payment system where you need money to receive money. This doesn't make any sense.”
Keceli has since moved on to other things, but the protocol and the newly formed Ark Labs continued to pursue the goal of building on and enhancing Lightning's contributions to Bitcoin.
Instead of requiring users to commit funds at the outset to establish liquidity, Ark uses service providers who provide 24-hour liquidity services for a fee.
Ark’s off-chain payments use an unspent transaction output (UTXO) model that uses virtual unspent transaction outputs (VTXOs) to facilitate unidirectional, one-time-only payments.
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