Ark is a trustless joinpool-style protocol where a large number of users share a UTXO by accepting a counterparty as a co-signer on all transactions within a certain time period. This spreads the cost of onchain fees from using that UTXO across many users, minimizing their individual costs.
The users can either unilaterally withdraw their bitcoins onchain after the expiry of the time period or instantly and trustlessly transfer them offchain to the counterparty before the end of the time period. Normally, a user will simply roll their bitcoins into another contract with the counterparty, which can be highly fee efficient when done with many other users at the same time. Alternatively, the counterparty may help the user make a payment onchain, through LN, or through any other protocol supported by the counterparty. Presumably, the counterparty would pass along to the user any fees the counterparty had to pay for using the payment protocol, e.g. forwarding fees if LN was used.
Ark can be implemented on Bitcoin with no consensus changes required, but it will support a larger number of users—making it much more fee efficient—if a covenant feature is added to Bitcoin.
Primary code and documentation
Optech newsletter and website mentions
- Improving LN scalability with covenants in a similar way to Ark
- Proposal for a managed joinpool protocol