Ark Labs has launched a protocol for scaling the bitcoin blockchain

What’s new? A new crypto company Ark Labs has been launched to develop a Layer 2 (L2) payment solution based on the bitcoin blockchain using the Ark protocol. The product is positioned as an improved version of Lightning Labs’ Lightning Network bitcoin payment protocol.

Material by The Block

What else is known? Ark Labs aims to provide a simplified non-custodial Bitcoin-based L2 solution that does not require node, payment channel, and liquidity management.

The company claims that the Lightning Network has helped make faster and cheaper payments, but the need to manage channels and liquidity has prompted many users to use custodial wallets, giving control of their funds to third parties in exchange for increased network usability.

The Ark protocol, work on which began in 2023, like the Lightning Network is an L2 solution to scaling the bitcoin blockchain to make bitcoin transactions faster and cheaper. However, Ark’s goal, according to its creators, is to provide ease of use without the need to custodialize assets.

Unlike Lightning Network, Ark users do not need to manage payment channels or inbound/outbound liquidity to make payments. According to the team, users also do not need to set up their own nodes, they only need a wallet on their smartphone to make payments with self-storage capabilities.

Lightning Labs has tested Taproot Assets-based stablecoin transactions on the bitcoin network

The protocol uses the Lightning L2 network for conducting transactions

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Ark consists of a network of Ark Service Providers (ASPs) that users can connect to with Ark-compatible wallets. ASPs are servers that issue virtual transactions after a deposit is made. These transactions can then be transacted at a low cost between users of the same ASP, sent to users of different ASPs via the Lightning Network, or redeemed on the blockchain at any time. ASPs can charge transaction fees to users making payments within Ark’s L2 network.

According to the developers, the redemption capability ensures users have full control over their funds even if the ASP is disabled.

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. The CEO is Marco Argentieri, with Cory Klippsten, CEO of California-based digital asset management platform Swan Bitcoin, acting as advisor.

Ark Labs will lead the implementation of the open-source Ark protocol, which is now available for anyone to create an ASP- or Ark-enabled wallet. The company is already developing several commercial services based on the Ark protocol, with the first application expected to launch later this year.