After two years of development, Ark Labs has launched Arkade in public beta. The project is backed by investors including Draper Associates, Axiom, and Fulgur Ventures. Arkade is being called the most advanced native Layer 2 for Bitcoin since the Lightning Network first appeared nearly ten years ago.
Built on the Ark Protocol specification from 2023, Arkade virtualizes Bitcoin’s transaction layer using Virtual Transaction Outputs, or VTXOs. These are offchain versions of Bitcoin’s native Unspent Transaction Outputs, or UTXOs. Importantly, Arkade works without changing Bitcoin’s consensus rules and fully relies on its existing security model.
Bitcoin doesn’t use accounts like some blockchains. Instead, it tracks ownership through UTXOs, which are created by previous transactions. Each UTXO is spent entirely when used, with any leftover value returned as new outputs. By virtualizing these outputs offchain, Arkade allows users to move, lend, or trade assets instantly. Each VTXO represents an offchain claim based on an onchain UTXO, coordinated by Ark Service Providers. These providers batch thousands of offchain transactions into single Bitcoin transactions, cutting costs dramatically. Users keep full custody of their funds, and every VTXO is backed by a presigned Bitcoin transaction, allowing assets to be reclaimed onchain at any time.
Unlike other so-called Bitcoin Layer 2 projects, many of which rely on sidechains or wrapped tokens on external blockchains, Arkade remains fully native to Bitcoin. It extends Bitcoin’s capabilities beyond payments to broader financial applications, without introducing extra trust or custodial risks.
Ark Labs CEO Marco Argentieri described the launch as a major step for Bitcoin’s evolution. While Bitcoin is widely viewed as digital gold, its base-layer limits have kept many financial applications on other blockchains. Arkade aims to unlock Bitcoin’s full potential by letting developers build directly on the network.
Originally pitched as an alternative to the Lightning Network, Arkade now goes beyond payments. Its virtualization model supports lending, trading, and asset issuance. It complements Lightning rather than replacing it, with integrations like Boltz allowing liquidity to flow between Lightning channels and Arkade’s offchain environment. Launch partners include Breez, BlueWallet, BTCPayServer, and exchanges like BullBitcoin.
Ark Labs Ecosystem Lead Alex Bergeron emphasized that Arkade supports applications previously impossible on Bitcoin without wrapped tokens or custodial compromises. The public beta marks the start of a broader rollout, with future updates including advanced scripting tools, stronger security, and support for more complex financial operations.
Alongside Arkade, Ark Labs introduced Arkade Assets, a framework enabling multiple asset types, including stablecoins. Bitcoin lost much of its stablecoin activity to other blockchains due to limited programmability, but Arkade Assets aims to bring it back. Tether USDT support is planned, and the framework seeks to restore Bitcoin as a key home for digital finance infrastructure. Argentieri said the launch lays the foundation for the next generation of Bitcoin applications, finally enabling stablecoins and other financial tools to operate directly on the world’s most secure blockchain.
