Ark rounds

Rounds are the heartbeat of an Ark server—periodic events where users can refresh their VTXOs to reset expiry times and gain trustless security.

During a round, multiple users coordinate with the Ark server to forfeit old VTXOs and receive new refresh VTXOs in return. This is achieved through a collaborative signing process, where, together with the server, users create a transaction tree (a hierarchical structure of pre-signed transactions) and broadcast its root on-chain—the round transaction.

What rounds accomplish

Users participate in rounds for three main reasons:

Expiry management: Refreshing any type of VTXO that is approaching its expiry time to reset the countdown and maintain control of their bitcoin.

Security upgrade: Converting spend VTXOs (which have additional trust requirements) into completely trustless refresh VTXOs.

Offboarding: Moving bitcoin back on-chain by creating an additional output from the round transaction to an on-chain address the user controls.

Rounds provide the coordination mechanism that enables these users to synchronize their activities. By scheduling periodic rounds, wallet apps can coordinate timing so multiple refreshing and offboarding users come online simultaneously to participate in the interactive signing process required to complete the transaction tree and associated forfeit transactions.

Payments now occur out-of-round

Early Ark protocol proposals included payments within rounds, but this is no longer the case. Second's implementation of Ark handles all payments instantly through arkoor (out-of-round) transactions. Rounds are now reserved for refreshes only.

Round process

Each round follows a structured process that requires synchronized coordination between the Ark server and users' wallet apps. Unlike payments on Ark, which only require the sender and server to be online, rounds demand live participation from all users that want to refresh or offboard:

1. Round announcement: The Ark server announces the start of a new round according to its configured schedule. The server must maintain reliable round timing to ensure wallet apps can coordinate automated participation, particularly for users with VTXOs approaching expiry.

2. User response: Refreshing users' wallet apps come online and communicate to the server which VTXOs they want to refresh or offboard. This stage requires all participants to be responsive within the round's timeout window, as unresponsive users will be excluded.

3. Transaction tree construction: The Ark server constructs the complete transaction tree and forfeit transactions for all participants. This complex coordination task involves managing fee estimation, liquidity provision, and ensuring the mathematical relationships between all transactions remain valid.

4. Collaborative signing: All users' wallet apps participate in an interactive signing process to authorize both the transaction tree and all associated forfeit transactions. This involves multiple communication rounds where users sign partially-signed bitcoin transactions (PSBTs) and exchange signatures with the server and other participants. Users who become unresponsive mid-signing can delay the round or force retries (with a new transaction tree).

5. Round funding and confirmation: The Ark server funds the round and broadcasts the round transaction on-chain, plus any additional outputs for offboards. The round is not complete until at least one on-chain confirmation. The server monitors block confirmations and handles any necessary acceleration.

An example of the kind of transaction tree that is produced during a round

User interactivity requirements

Current Ark implementations require active user participation during rounds because:

• VTXO selection: Users choose which VTXOs to forfeit and how to structure their refresh or offboard outputs
• Signature coordination: Users must provide signatures for the complex transaction trees and associated forfeit transactions

This means that users' wallet apps must be online and responsive regularly to participate in round windows when needed—not for every round, but often enough to refresh VTXOs before they expire.

Atomic forfeits through connectors

The use of connectors ensures this complex coordination process remains atomic and secure. Forfeit transactions only become valid if the round transaction confirms, ensuring users can't forfeit their VTXOs without receiving new ones in return! Users retain unilateral exit rights to their existing VTXOs until the round transaction is confirmed.

Conversely, the construction of the round transaction depends on the existence of signed forfeit transactions, ensuring the server cannot deploy liquidity without a guarantee they can reclaim an equivalent amount of bitcoin after expiry.

User experience considerations

Well-designed Ark wallet apps should automate round participation to ensure users' VTXOs never expire. Wallets need to monitor round alerts (wake the device if necessary), prioritize participation when the user holds VTXOs approaching expiry, and retry missed or failed rounds.

Round timing and interval

Round frequency is a configurable server parameter. Second's Ark server is expected to conduct rounds every 1-2 hours, though this may vary based on demand and server policy.

A one-hour round interval will result in a round transaction being confirmed roughly every six blocks

Interval length trade-offs

All things being equal, more frequent rounds will inevitably attract fewer participants per round since users are spread across more opportunities to refresh. Conversely, less frequent rounds lead to more participation demand per round. This fundamental relationship drives several important trade-offs:

	Shorter round interval	Longer round interval
Wait time for refreshes	Shorter wait times enable faster security upgrades and urgent expiry management	Longer wait times can be inconvenient for users with soon-to-expire VTXOs
On-chain fee sharing	Higher per-user costs due to fewer participants splitting the round transaction fee	Lower per-user costs due to more participants splitting the round transaction fee
Unilateral exit	Fewer transactions to complete exit (shallower trees)	More transactions to complete exit (deeper trees)

Flexible round scheduling

While Second's Ark server will use fixed periodic rounds, servers can technically implement more flexible scheduling:

• Demand-based rounds: Queue thresholds for triggering a round
• Emergency rounds: On-demand rounds for users with soon-to-expire VTXOs
• Scheduled maintenance: Temporary increase in round frequency before planned downtime

Round economics

Executing rounds involves two major costs for an Ark server:

1. On-chain transaction fee: The cost of getting a round transaction confirmed on-chain, which is spread across all users participating in the round—the more users, the lower the cost per user. Despite the underlying transaction tree requiring an n-of-n multisig potentially involving hundreds of users, the Ark protocol uses Taproot and MuSig to make this complex script appear on-chain as a simple single-signature transaction, minimizing the blockchain footprint.

2. Liquidity deployment costs: When users refresh or offboard their VTXOs, the Ark server must deploy bitcoin (liquidity) from its wallet to fund the new outputs. The forfeited bitcoin from old VTXOs only becomes available to the server after those VTXOs expire, so there is a cost of capital to cover. This cost is independent of the number of users participating in the round, and is instead dependent on the amount of bitcoin being forfeited and the age of the VTXOs.

Note

Fee schedules for Second's Ark server are still being finalized, and may not directly reflect the server's costs for users' individual operations. You can read more about fee considerations on our fees page.

Simultaneous expiry

All VTXOs created in a round share the same expiry time—the absolute timelock on the round transaction and all branch transactions expires simultaneously.

Under normal circumstances, users will forfeit their VTXOs before expiry (through spending, refreshing, or offboarding) to retain control over their bitcoin. This means that when expiry occurs, the server can sweep the entire round's bitcoin balance to its own wallet in a single on-chain transaction, rather than needing to reclaim individual VTXOs separately.