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VTXO expiries

All VTXOs have expiry times that determine when the server can claim any remaining bitcoin. Understanding expiry is crucial for maintaining control of your bitcoin.

What happens when VTXOs expire?

When a VTXO reaches its expiry height, the server gains the ability to sweep any remaining bitcoin to its own wallet through the timelock spend paths. Users also retain the ability to spend the VTXO or unilaterally exit (as long as they haven't forfeited it).

This mechanism allows servers to replace liquidity deployed during the VTXO's lifetime and prevents users from griefing servers by holding expired commitments indefinitely.

Diagram of an Ark server sweeping an expired round to its own wallet

Once the VTXOs in a round have expired (simultaneous), the Ark server sweeps the round transaction to its own wallet

Avoiding expiry

Users have several options to maintain control before expiry:

  • Spend the VTXO: Create spend VTXOs for payments (inherits original expiry)
  • Refresh in a round: Convert to a new refresh VTXO with fresh expiry time
  • Cooperative exit: Work with the server to create an offboard transaction
  • Unilateral exit: Broadcast all transactions in the VTXO to claim bitcoin on-chain (reserved for emergencies!)

In practice, users shouldn't need to worry about expiries as long as their wallet app comes online regularly. Well-designed wallet apps should implement automated policies to prevent expiry, such as prioritizing older VTXOs for spending and automatically refreshing VTXOs that approach expiry thresholds.

Server incentives for honest behavior

While wallet apps should manage expiries proactively, Ark servers are also strongly incentivized to operate honestly even in the rare event that a VTXO does expire. Any attempt by a server to claim non-forfeited bitcoin would be quickly identifiable by users and other observers. Such behavior would cause users to immediately offboard or exit their bitcoin, resulting in significant business losses for the server. The economic incentives therefore favor honest operation over attempting to snap up a few expired VTXOs.