Ark’s Bitcoin scaling proposal is moving closer to reality. After a year of research focused on refining its reference implementation, Ark Labs today announced the completion of a $2.5 million pre-seed funding round led by Tim Draper and his firm, Draper Associates. While the technical feasibility of Ark’s approach was initially debated, today’s announcement is a strong vote of confidence in the future of the protocol and the developers behind it.

Speaking to Bitcoin Magazine, Ark Labs co-founder Marco Argentieri expressed excitement about the future, suggesting that Ark is poised to significantly scale its existing scalability efforts.

“This funding will accelerate our efforts to make Bitcoin transactions as simple and user-friendly as possible, making fast, cheap, and user-friendly transactions powered by Bitcoin a reality for potentially billions of people worldwide.”

Argentieri emphasizes that the company is initially focused on supporting the adoption of Bitcoin’s popular Layer 2 solution, as it was initially intended as an alternative to the Lightning Network.

“Lightning has made tremendous strides recently,” he said. “We believe we can leverage this network effect to bring Ark to market and improve the self-custodial experience for existing Lightning users.”

Ark addresses these challenges by leveraging trustless servers, allowing Lightning users to mitigate the headaches typically associated with operating Lightning infrastructure. A recent trend in reducing the cost of on-chain operations related to liquidity management is to rely on custodial or federated options such as the Liquid sidechain.

“Unfortunately, this approach introduces custodial obligations that are contrary to Bitcoin’s original vision. Ark has the potential to overcome these challenges at scale without compromising trust,” Argentieri said.

When asked about his motivation behind the investment, lead investor Tim Draper agreed:

“Soon, many people around the world will be living on the Bitcoin standard. Today, we should not only focus on how to buy and store Bitcoin, but also how to use it as a medium of exchange for everyday purposes. Ark’s architecture enables seamless Bitcoin payments, in a way that stays true to the core principles of decentralization and self-custody”

One of Ark Labs’ first challenges was to transform the Ark Protocol from a rough concept to a fully realized solution. According to Argentieri, the initial documentation and parameters proposed by the creator were not fully fleshed out and sometimes hindered a broader understanding of the technology.

“Many concepts were not fully fleshed out and the random numbers discussed did not capture the flexibility of the protocol, particularly in addressing liquidity issues,” he explained.

Perhaps the most notable confusion was the need for covenants. Bitcoin covenants are smart contract restrictions that limit how and where future transactions can be spent, improving security and control over funds. While covenants could significantly improve the user experience around Ark and potentially improve capital efficiency, Argentieri points out that a fair number of use cases could already benefit from a “covenant-less” version:

“A variety of users can take advantage of Ark’s features. While mobile clients are more challenging at this time, using pre-signed transactions is a viable alternative to covenants for online servers.”

He also believes his company is well positioned to provide the first production service that can validate the potential of the technology. “When Ark is operational with actual capital deployed and large numbers of users benefiting from the infrastructure, it should make a strong case for covenants.”

The team recently issued An alpha version of the covenant-less implementation is now available on GitHub. Coming soon is the Ark Node, an Ark-enabled wallet that will allow users to send, receive, and swap Bitcoin via the Lightning Network, all within a user-friendly dashboard. Interested users should sign up at the website to receive updates for closed beta testing in early September, with a broader rollout expected later this year.

The funding round includes Bitcoin-focused funds Axiom and Fulgur Ventures, along with prominent investor Stephen Cole. Allen Farrington, general partner at Axiom, shared his excitement for the project: “We’re excited to support what looks to be a substantial breakthrough in broadening Bitcoin’s utility as a means of payment and bringing more sophistication to the network’s financial infrastructure.”

Ark Labs invites developers, top talent, and potential partners to contribute to its efforts.

By newadx4

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