Mechanisms for onboarding and exiting Arkade
Ramps are the mechanisms that allow users with Bitcoin to onboard and exit from Arkade with its own built-in mechanisms. They are designed to provide a seamless experience for users, allowing them to move funds in and out of Arkade. There are two types of ramps: Boarding (onboarding) and Exiting (offboarding).
Boarding is the process of swapping an onchain UTXO for an offchain VTXO. The preferred method for onboarding funds into Arkade is by sending Bitcoin to a boarding address.
First, get a boarding address from your wallet. This is a specialized 2-of-2 multisig Taproot address.
Send Bitcoin to this address using any standard Bitcoin wallet. This creates an onchain UTXO that will be used for boarding.
Once the transaction is confirmed, check for available boarding UTXOs and settle them to your Arkade wallet.
The Arkade Operator processes the registration and includes the UTXO in a Commitment Transaction.
Once the Commitment Transaction is confirmed, you now have a VTXO (Virtual UTXO) within a Batch Output that you can spend offchain.
Boarding addresses resemble VTXOs but typically use longer timelocks to reduce risk.
While any UTXO can be used as an input, a boarding address is the preferred way as it removes the risk of a malicious user double-spending the UTXO and replacing or failing the commitment transaction.
Exiting is the process of swapping a VTXO (offchain) for a UTXO (onchain). The collaborative exit process is the most efficient way to exit Arkade when the Operator is available.
Specify the destination address and amount for the onchain UTXO.
Request the Arkade Operator to settle your VTXO to an onchain UTXO.
The Operator includes this request in a new Commitment Transaction and broadcasts it to the Bitcoin network.
Once confirmed, your funds are available as a standard onchain Bitcoin UTXO.
This method offers immediate withdrawal with lower delay and is operationally simpler than unilateral exits.
Unilateral exit is the process of exiting a VTXO to an onchain address without the Operator’s involvement. This is a more complex and expensive process and should only be done if the Operator is not available.
Unilateral exit requires unrolling a set of transactions leading to your VTXO. Each transaction contains a P2A output letting to pay for the miner fees. So you need onchain funds to pay for them.
Unrolling a VTXO is the process of putting a list of virtual transactions in a block. The current mempool limitation makes it impossible to unroll all transactions at once. So the process is sequential, where each step requires the previous transaction to be confirmed.
VTXO unilateral exit tapscript is always locked by a relative locktime (CHECKSEQUENCEVERIFY) before being spendable.