Ark offboarding

Offboarding is the standard way to move bitcoin from the Ark protocol back to an on-chain address. Offboarding is a cooperative process between a user and the Ark server that's more efficient and cost-effective than a unilateral exit, which should be reserved for emergency situations.

When a user offboards, they participate in a round, but instead of refreshing, they forfeit their VTXOs for an additional output in the round transaction that sends their bitcoin to an on-chain address of their choice. This process is atomic and trustless—neither the user nor the Ark server are exposed to counterparty risk.

The offboarding process

1. Join round: The user responds to the Ark server's round, indicating that they want to offboard specific VTXOs, and the on-chain address they want to offboard to.
2. Construct round transaction: The server adds the user's offboard output to the round transaction, alongside other users' refreshes and offboards.
3. Check and sign: The user confirms that the requested output is present in the round transaction, then signs forfeit transactions for the VTXOs they're offboarding, transferring control to the server.
4. Broadcast round transaction: The server signs and broadcasts the round transaction.
5. Wait for round confirmation: The user's bitcoin arrives at their specified on-chain address once the round transaction confirms.

The whole offboarding process is fairly quick—at most a couple of minutes for the round transaction to be constructed, then however long it takes for the round transaction to be confirmed.

Offboarding process: User (Wendy) forfeits VTXOs in exchange for an on-chain output

Atomic guarantee

The offboarding process is completely atomic thanks to connectors. A user's forfeit transactions only become valid when the round transaction confirms on-chain, this eliminates any possibility of either party losing bitcoin during the offboarding process.

Offboarding fees

Offboarding involves several cost components that will affect the total expense:

• Liquidity costs: The Ark server must immediately deploy bitcoin to fund the additional on-chain output and wait for the forfeited VTXO(s) to expire before it can sweep the bitcoin. Costs depend on the amount offboarded, VTXO age, and the server's cost of capital.
• Shared on-chain fee: The offboarding user shares the transaction fee to broadcast the round transaction with all other participants refreshing and offboarding in that round.
• Ark server fees: The Ark server may charge additional fees to cover general operational costs.

Second's fee schedules are still in development.

Emergency offboarding

If a user needs to offboard urgently but the server is unresponsive, they should use unilateral exit instead. While more expensive, unilateral exits guarantee a user can access their bitcoin on-chain without server cooperation.

However, users should be aware that unilateral exits take longer to complete (requiring multiple transaction confirmations plus a timelock period) and cost more in on-chain fees.