Burak Keceli, a 24-year-old self-taught Bitcoin developer and researcher, is proposing a new layer 2 protocol dubbed Ark that he says will solve Bitcoin’s inbound liquidity problem. Inbound liquidity is the ability to receive funds on the Lightning Network, a layer 2 payment network introduced in 2016 that enables cheaper and faster Bitcoin transactions. However, this receiving capacity must first be established by committing funds and making outbound payments. Keceli believes that Ark will make Bitcoin transactions cheaper and faster, but without the need for a recipient to commit funds. “Lightning has many problems. But number one to me is the inbound liquidity problem,” Keceli said. “Imagine a payment system where you need money to receive money. This doesn’t make any sense.”
Keceli’s objection to the Lightning Network’s inbound liquidity requirement is what inspired him to create Ark. He has been working on the project mostly solo and hasn’t incorporated or raised capital, choosing to keep the project open-source and donation-funded. The project is already receiving significant attention from prominent Bitcoiners, such as Alex Gladstein, Chief Strategy Officer of the Human Rights Foundation, who tweeted, “Excited to see new ideas like Burak’s, come to Bitcoin.”
Keceli’s journey to creating Ark began when he watched a YouTube video about Bitcoin mining and decided to dive in head first. He built a Bitcoin wallet and realized that Bitcoin didn’t scale. During the block size war, he joined the Bitcoin Cash camp and attempted to build an automated market maker (AMM) on the blockchain, but it was not expressive enough. He then turned to Liquid, a federated sidechain, and used it to build the AMM, which he branded “Bitmatrix.” After Bitmatrix didn’t garner the success he had hoped for, he shifted his focus to the Lightning Network and began working on a Lightning wallet to address the network’s issues. This eventually morphed into the standalone protocol Ark.
Ark is much like Lightning in that it scales Bitcoin by transacting off-chain, but it eliminates the need for users to commit funds at the outset as a way of establishing liquidity. Instead, Ark service providers (ASPs) are “always on” and provide 24-hour liquidity services for a fee. Ark’s off-chain payments use virtual unspent transaction outputs (VTXOs) to facilitate unidirectional, one-time-only payments. The final push by the ASP is actually an on-chain CoinJoin, which gives Ark a privacy edge over Lightning.
Keceli believes that Ark and Lightning will complement each other, as an Ark service provider is also a Lightning service provider. Ark’s development is still in the early stages, and Keceli is currently focused on answering questions from the Bitcoin community and finalizing technical specifications. After that, he plans to shift to prototyping and raising capital to build Ark Labs, an infrastructure company for profit.