Company Name: Arca Laboratories
Founders: Marco Argentieri and Simone Giacomelli
Founding date: June 2024
Headquarters Location: Europe
Number of employees: Six full time
Website: https://arklabs.to/
Public or Private? Private
Ten years ago, just after graduating from high school, Marco Argentieri began his career in bitcoin.
Some of his first jobs in the industry included helping people make remittance payments using bitcoin. From those early days, Argentieri saw bitcoin more as a currency and less as an investment, and he helped others use it more easily.
“There were a lot of people using bitcoin because it was like a Western Union without the KYC hurdles, and it was a lot cheaper back then,” Argentieri told bitcoin Magazine.
“They weren't even interested in the price or volatility of bitcoin. They simply used it to send money abroad,” he added.
Fast forward to 2024, and Argentieri is still focused on the same mission: helping people use bitcoin cheaply, easily, and privately. Although today he does it in a more sophisticated way through his company. Arca Laboratoriesthrough which Argentieri and his team develop bitcoin Layer 2 Ark.
What is the Ark?
Ark is an open source protocol created to help scale bitcoin. The protocol allows users to amortize the cost of a single on-chain transaction across many off-chain exchanges. These exchanges occur on Ark servers and are best suited for bitcoin users who already operate Lightning nodes.
Ark servers were created to remedy Lightning's liquidity limitations by allowing users to receive funds off-chain in what is called vTXO (Virtual Transaction Outputs), alleviating the need to open a channel and/or receive liquidity incoming. The off-chain system runs on Ark servers, which also allow unilateral on-chain withdrawals.
Ark provides and obtains liquidity for the transactions it facilitates through its servers (rather than relying on peers for liquidity like Lightning does). Argentieri adopted Ark as a solution after recognizing Lightning's shortcomings.
“Looking at a current scaling solution like Lightning, the developers were idealistic in the sense that they said, 'Okay, people should have the keys, which is a big, big step. And also, they also run servers and they also became very adept at liquidity management and all that,” Argentieri explained. “I think that hasn't been a very realistic assumption about how people operate.”
Argentieri founded Ark Labs under the pretext that, just as most people didn't want to deal with using bitcoin on their own for remittance payments 10 years ago, they don't want to become experts at running Lightning nodes to make payments on these. days.
“Ark tries to build on this assumption that there will be specialized people or specialized companies that know how to handle liquidity, and that's what we call Ark servers,” he explained.
“Then there are the customers: people who just want to send or receive a payment and use bitcoins. “They really don't want to go into all the complexity,” he added.
“Ark starts with the assumption that not everyone is a peer, so there will be a liquidity provider on one side and a user on the other. We recognize that this is the natural course of things, even if we don't like it.”
Argentieri, a pragmatist, recognizes that while Ark's centralized design may not be philosophically perfect, it is effective.
“The goal again was to have a protocol that started to work backwards from the user's perspective and not from an ideal scenario,” Argentieri explained.
“If you think from a user perspective, they really just want to have a user experience that looks like bitcoin on the chain. With on-chain bitcoin, you only have one pair of keys. You just create a simple key and, boom, you can receive it,” he added, detailing how Ark works.
A bitcoin interest rate
UTXO holders can serve as liquidity providers for Ark, which Argentieri sees as an opportunity, especially for those in the West.
“In the Western world, we know that people are really attached to this concept of performance,” Argentieri said.
“Westerners can't just store sats in cold storage and be nice to them. “They really feel like they are missing something,” he added, laughing.
Whether to obtain liquidity for Ark's servers or to quench Westerners' thirst for yield, those who wish can become liquidity providers for Ark for a small fee.
“Ark is really like a way to introduce a bitcoin interest rate,” Argentieri posited. “Ark can be a real native interest rate discovery mechanism for bitcoin.”
Argentieri described how liquidity providers can share a small percentage of their bitcoin holdings through what he calls a “warm wallet,” a wallet that allows users to keep the keys but to which Ark still has access.
The return would come in the form of transaction fees through the VTXO model. While Argentieri said some may see this as “funding bitcoin,” he simply sees it as a win-win, a way to help scale while also offering a small reward to those who provide the liquidity to help do so.
Scale horizontally
While a layer 2 solution like Lightning helps bitcoin scale vertically, Ark helps bitcoin scale horizontally, according to Argentieri.
“With Lightning, we set up an address and then two people can make an infinite number of transactions with each other, but that doesn't scale,” he said.
With Ark, a UTXO can provide liquidity for an exponential number of transactions compared to the amount of funds in the UTXO. Argentieri gave the example that 100 btc can provide liquidity for tens of thousands of virtual transactions.
Ark not only allows for more transactions, but it can also be used in many of the same ways that bitcoin can be used.
“People are very focused on Ark for payments, but the beauty of Ark is that it retains most of the UTXO capacity, which means you can do 95% of the things you can do in bitcoin right now on ARK” said Argentieri. “You can do multiple signatures and open multiple channels with a single address.”
Argentieri also shared that using Ark is almost as unreliable as using bitcoin, because even if Ark shuts down its servers, you can still put your sats back on the chain.
“If for some reason the server disappears, censors me, or goes offline, the entire virtual transaction tree goes on-chain,” Argentieri explained. “This is what we call unilateral exit.”
The future of the Ark
Argentieri said Ark is working hard to prepare to bring leaf node to the market, an enterprise-grade B2B offering that Argentieri described as a “complement to its LND node” that will help companies rebalance their liquidity.
In bitcoin Amsterdam Last month, Ark Labs announced a partnership with Boltz to enable off-chain Lightning liquidity management, with the intention of making exchanges faster, cheaper, and easier through Ark Node.
Aside from that, it seems that Argentieri and the team at Ark Labs have a seemingly countless number of new advancements in the works, although it will take some time for the company to implement them.
“I live in action, so I want to release things every week, but engineering takes time, especially when you're the first to do these things,” he said.
The plan for now is to remain on the mission, the last state of the mission he embarked on ten years ago.
“We can really have a tangible result within the bitcoin ecosystem,” Argentieri concluded. “People will see bitcoin payments improve and we hope to be part of the reason that will happen.”
