Ark’s bitcoin scalability proposition is getting closer to reality. After a year of research focused on perfecting the reference implementation, Ark Labs today announced the completion of a $2.5 million 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 show of confidence in the future of the protocol and the developers behind it.
Speaking to bitcoin Magazine, Ark Labs co-founder Marco Argentieri expressed his excitement about the road ahead and suggested that Ark is poised to provide a significant boost to existing scaling efforts.
“This funding will accelerate our efforts to make bitcoin transactions as simple and user-friendly as possible, making fast, low-cost, and easy-to-use transactions powered by bitcoin a reality for billions of people around the world.”
Initially conceived as an alternative to the Lightning Network, Argentieri emphasizes that his company's immediate focus is on supporting the adoption of bitcoin's popular Layer 2 solution.
“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-custody experience for existing Lightning users.”
Ark addresses these challenges by using trustless servers, allowing Lightning users to mitigate the difficulties typically encountered when operating Lightning infrastructure. A recent trend in reducing the costs of on-chain operations related to liquidity management has been to rely on custodial or federated options such as the Liquid sidechain.
“Unfortunately, this approach introduces custodial trade-offs that conflict with the original vision of bitcoin. 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 echoed the same sentiment:
“Soon, many people around the world will be living on the bitcoin standard. Today, we need to focus not only on how to buy and store bitcoin, but also on 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 its core principles of decentralization and self-custody.”
One of Ark Labs’ first challenges was to transform the Ark protocol from a basic concept to a fully realized solution. According to Argentieri, the initial documentation and parameters proposed by its creator were not fully developed and sometimes hindered a broader understanding of the technology.
“Many of the concepts lacked full development, and the arbitrary numbers being discussed failed to capture the flexibility of the protocol, particularly when addressing liquidity issues,” he explained.
Perhaps the most notable confusion has been around 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 can significantly contribute to the user experience around Ark, as well as potentially improve capital efficiency, Argentieri insists that a good number of use cases can already benefit from a “covenant-less” version:
“Different types of users can take advantage of Ark’s features. While mobile clients are more challenging at the moment, using pre-signed transactions is a viable alternative to online server agreements.”
He also believes his company is well positioned to offer the first production service that can validate the technology’s potential. “Once Ark is up and running with real capital deployed and a large number of users benefiting from the infrastructure, it should help make a strong case for signing deals.”
The team recently released An alpha release of the pact-free implementation is now available on GitHub. It will soon be followed by Ark Node, an Ark-enabled wallet, allowing users to send, receive, and exchange bitcoin over the Lightning Network, all within an easy-to-use dashboard. Interested users should sign up at website to receive updates for closed beta testing in early September, with a wider release expected later this year.
This round of funding is joined by bitcoin-focused funds Axiom and Fulgur Ventures, along with prominent angel investor Stephen Cole. Allen Farrington, General Partner at Axiom, shared his enthusiasm for the project: “We are excited to support what appears to be substantial progress in expanding bitcoin’s utility as a means of payment and bringing greater sophistication to the network’s financial infrastructure.”
Ark Labs invites developers, top talent, and potential partners to contribute to its efforts.
