Glossary

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A

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arkd

arkd is the server implementation of Arkade, enabling offchain transactions, onchain settlement, and virtual output management. It runs as two processes (arkd and arkd-wallet) and exposes APIs via ArkService, IndexerService, and AdminService for coordination, querying, and administration.

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ArkService

The ArkService is the primary gRPC/REST API of arkd, handling the core business logic of Arkade. It manages intents, batch coordination, MuSig2 signing, and offchain virtual output spending, while also providing real-time transaction streams.

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Arkade Asset

An Arkade Asset is a Bitcoin-native token that lives on virtual outputs and moves through standard Arkade transactions. Assets are issued, transferred, and burned via the SDK’s assetManager interface. Each asset is identified by a permanent assetId derived from its issuance transaction, and can carry immutable metadata (name, ticker, decimals, icon). Supply can optionally be kept open-ended by referencing a Control Asset at issuance time.

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Arkade

An open execution engine for Bitcoin that enables programmable money through offchain coordination while preserving Bitcoin’s security guarantee. Arkade virtualizes Bitcoin’s transaction capabilities to enable instant, parallel execution without consensus changes.

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Arkade Operator

The Arkade Operator is the coordinator of Arkade’s virtual execution engine who validates transactions, forwards requests to the Arkade Signer, and aggregates operations into onchain commitment transactions. Cannot unilaterally spend user virtual outputs due to architectural constraints.

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Arkade Script

Arkade Script is an enhanced version of Bitcoin Script that enables expressive and stateful transaction flows. It extends Bitcoin’s opcodes with additional primitives for introspection, arithmetic, logic, and asset operations, running exclusively in the preconfirmation state.

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Arkade Script Compiler

The Arkade Script Compiler is an experimental development tool that translates high-level contract logic into executable Arkade Script code. Inspired by Bitcoin scripting languages like Ivy and CashScript, it verifies scripts preserve Arkade constraints and unilateral exit guarantees.

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Arkade Signer

The Arkade Signer is an independent entity that manages the cryptographic keys used for cosigning user transactions. Operates within a TEE and generates a single key that all Arkade addresses require for virtual output cosigning, isolated from operator control.

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Arkade Transaction

Arkade Transactions are the default transaction type within Arkade. They are standard presigned Bitcoin transactions used within Arkade to coordinate offchain execution with unilateral exit option for the user.

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Batch Expiry

The batch expiry is a timeout mechanism where Batch Outputs can be swept by the Arkade Operator after a predetermined period. Essential for operator liquidity management, as the operator must front capital while users transition between virtual outputs.

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Batch Output

A batch output is a single Bitcoin output that consolidates multiple users’ ownership claims through a tree of presigned virtual transactions. Created through Commitment Transactions and locked to a Taproot address with specific spending conditions.

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Batch Swaps

A batch swap is the process of aggregating multiple Arkade Transactions into a single onchain Commitment Transaction, allowing many offchain operations to be compressed into one Bitcoin transaction output.

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BIP322

BIP322 defines a standard for signing arbitrary messages in Bitcoin using virtual transactions, enabling secure proofs of address ownership for any script type, including multisig and Taproot, which can then be used with intents.

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Bitcoin Finality

The highest level of transaction security achieved when virtual outputs are anchored to the Bitcoin blockchain through a Commitment Transaction, inheriting Bitcoin’s security guarantees.

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Collaborative Path

One of two spending paths of a virtual output that requires both the owner’s signature and a cosignature from the Arkade Signer. This is the default path used for Arkade operations, enabling instant offchain transactions.

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Control Asset

A Control Asset is a special Arkade Asset that authorizes supply changes for another asset. When an asset is issued with a controlAssetId, the holder of that control asset can reissue (increase supply) at any time. Transferring the control asset transfers reissuance authority; burning it permanently disables reissuance.

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Commitment Transaction

A commitment transaction is the onchain Bitcoin transaction that finalizes Batch Outputs as settlements, serving as the anchor for users to enforce their offchain balances onchain using presigned transaction paths.

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D

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DAG (Directed Acyclic Graph)

A DAG is the data structure used in Arkade’s Virtual Mempool where transactions form nodes that explicitly encode dependencies, enabling parallel execution of independent transaction branches.

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E

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Emulator

The Emulator is a cosigner that evaluates Arkade-specific opcodes — covenants, custom arithmetic, and other spending conditions Bitcoin consensus doesn’t natively enforce. Anyone can run an emulator; it isn’t exclusive to the operator, though the operator runs one as part of the execution stack alongside arkd (coordination) and the Arkade Signer (cosigning).

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End-to-End Encryption (E2EE)

The e2ee is a privacy mechanism ensuring communication between users and the Arkade Signer remains confidential and uncensorable, preventing the operator from intercepting or blocking specific transactions.

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Exit Path

One of two spending paths in a virtual output that allows the owner to spend funds unilaterally without operator cooperation, serving as a fail-safe option that guarantees user sovereignty over assets.

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Forfeit Transaction

Forfeit Transactions are special Arkade transactions that protect the operator against fraud: if a user spends a virtual output offchain and then tries to also redeem it onchain, the operator broadcasts the presigned forfeit transaction to claim the funds instead, closing off the double-spend.

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I

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IndexerService

The IndexerService is Arkade’s read-only API for transaction data. It provides gRPC/REST endpoints to query commitment transactions, virtual transaction trees, forfeit and sweep data, and to subscribe to script-level activity. Builders use it to audit fund lifecycles, trace transaction chains, and monitor batch-level events without running custom indexers.

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Intent

Intents in Arkade are offchain, presigned Bitcoin transactions based on BIP322 that prove ownership of inputs and specify outputs, enabling a user to participate in a batch swap or delegate the virtual output renewal in case of a user being offline.

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Intent Delegation

Intent Delegation is a mechanism that allows users to authorize a delegate to renew their virtual outputs on their behalf by submitting a signed intent within a specified time window. Delegates cannot alter outputs or move funds unilaterally, ensuring the user retains full control and unilateral exit capability. This enables seamless renewal while preserving non-custodial security.

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M

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Mass Exit

A risk scenario where many users attempt to simultaneously exit the system, potentially creating high costs due to elevated Bitcoin network fees and congestion in unilateral exit paths.

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MuSig2

A Bitcoin signature scheme used in Batch Outputs with an n-of-n internal key where all participants serve as cosigners, providing cryptographic security for the batch structure.

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Parallel Execution

Arkade’s ability to process transactions simultaneously across independent virtual output branches without coordination overhead, enabled by the DAG structure of the Virtual Mempool and its UTXO-based architecture.

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Pay-to-Taproot (P2TR)

A Bitcoin address type that embeds complex spending conditions in a compact script tree, only revealed when exercised. Arkade uses P2TR to batch multiple offchain transactions into a single virtual transaction tree, giving it a compact onchain footprint and privacy.

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Preconfirmation

The instant transaction confirmation provided when the Arkade Signer cosigns a user’s transaction, enabling immediate execution within the Virtual Mempool.

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Remote Attestation

A cryptographic verification mechanism that proves the Arkade Signer is running expected, tamper-free code within a TEE, providing transparency about the software’s integrity.

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Taproot

A Bitcoin protocol upgrade that enhances efficiency, privacy, and flexibility by allowing complex spending conditions to be embedded in compact script trees. Arkade uses Taproot to construct Batch Outputs that consolidate many offchain transactions into a single, private virtual transaction tree.

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TEE (Trusted Execution Environment)

Hardware-backed secure enclaves (like Intel SGX) that provide isolated execution environments with cryptographic attestation capabilities, used to protect Arkade Signer keys and ensure verifiable execution.

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U

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Unilateral Exit

Unilateral exit is the ability for users to independently move their funds from Arkade to the Bitcoin blockchain at any time without requiring permission or cooperation from the Arkade Operator, enabled through presigned transaction paths.

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Virtual Mempool

Arkade’s offchain execution engine, the virtual mempool, processes transactions in real-time without block time constraints, organizing them in a DAG structure that enables parallel execution and instant coordination.

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Virtual Transaction Output (VTXO)

The core unit of value in Arkade is a VTXO, or virtual output: a programmable, offchain object that mirrors a Bitcoin unspent transaction output (UTXO) but exists in the Virtual Mempool. Each virtual output is backed by a presigned Bitcoin transaction that has not yet been broadcasted, and includes defined ownership, value, and spending conditions, supporting both collaborative and unilateral exit paths.

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Virtual Transaction Tree

A virtual transaction tree is the hierarchical organization of virtual transactions that splits Batch Outputs into individual virtual outputs at the leaves, enabling selective unrolling where users can exit without affecting other participants.

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Virtualization

Virtualization is the core approach of Arkade that abstracts Bitcoin’s outputs into a programmable execution model, similar to how computing virtualization separated software from physical hardware constraints.

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VTXO Expiry

VTXO expiry is part of a lifecycle management mechanism where virtual outputs require periodic user attention to avoid expiration, creating incentives for users to remain active and settle their preconfirmed positions appropriately.