Arkade Operating System Terms
Last Updated: Oct 20, 2025

These Terms of Service ("Terms") constitute a legally binding contract between you and AKR Labs OÜ. ("Ark Labs," "we," "us") governing your access to and use of Arkade.Computer, an instance of the Arkade Operating System (collectively, "Arkade"). By using Arkade, you agree to be bound by these Terms. If you do not accept these Terms, you are not permitted to access or use Arkade.

1. Ark Protocol Architecture

The Ark protocol is an open source Bitcoin protocol implementing Virtual Transaction Outputs (VTXOs). VTXOs are presigned Bitcoin transaction structures enabling off-chain state transitions while maintaining unilateral exit capability to Bitcoin's base layer. The Ark protocol itself is not controlled by Ark Labs. It operates through open source software and Bitcoin Script constructions that, once deployed, execute deterministically without intermediary control.

Ark Labs does not control what applications third parties build using VTXOs, the activity of such parties, any user transacting via VTXOs, or any data stored in VTXO structures. Ark Labs does not take possession, custody, or control over bitcoin or other digital assets represented in VTXOs unless expressly stated in a written contract signed by Ark Labs.

You acknowledge that Ark Labs makes no representations or warranties regarding the Ark protocol, and that if you use it, you do so at your own risk.

2. Arkade Operating System Components

Arkade.Computer runs the Arkade Operating System, providing three distinct technical functions:

Batcher. The Batcher coordinates off-chain state transitions in the Virtual Mempool and aggregates VTXOs into Bitcoin commitment transactions. It validates VTXO structure, manages the Virtual Mempool directed acyclic graph tracking transaction dependencies, and constructs batch outputs containing presigned transaction trees. The Batcher does not execute transactions on behalf of users. It coordinates transaction structures that users control via cryptographic keys.

Signer. The Signer operates within a Trusted Execution Environment and generates a single signing key required for VTXO co-signatures. The Signer enforces deterministic validation rules and cannot deviate from its verified code path. Users communicate with the Signer via end-to-end encryption. The Signer automatically signs burn transactions when presented with cryptographic proof of double-spend violations. The Signer cannot access your private keys, read your encrypted communications, or unilaterally spend VTXOs.

Liquidity Provider. The Liquidity Provider commits capital on-chain in batch outputs to back presigned VTXO trees. This capital enables unilateral exits by broadcasting presigned transaction paths. The Liquidity Provider fronts capital for new batches before reclaiming forfeited VTXO outputs after expiry.

Ark Labs currently performs these functions but may distribute them to third parties. These functions remain strictly bounded by Bitcoin Script execution and Trusted Execution Environment verification constraints.

3. Arkade.Money Reference Wallet

Arkade.Money is free and open source software implementing a client-side wallet for interacting with VTXOs. Arkade.Money runs entirely on your device and does not transmit private keys or seed phrases to Ark Labs. Your relationship with any wallet software is governed by that software's license terms, not these Terms. You are responsible for maintaining the confidentiality of private keys and are fully responsible for all messages signed with your private key.

4. Arkade's Technical Limitations

Arkade's architecture imposes strict limitations. Arkade cannot:

• Unilaterally spend VTXOs (all spending requires your signature)

• Override presigned exit paths (exits are enforced by Bitcoin Script)

• Access the Signer private key (key remains isolated in Trusted Execution Environment)

• Read end-to-end encrypted communications (your messages to Signer are encrypted)

• Prevent exit broadcasts (you can broadcast presigned transactions to Bitcoin's mempool at any time)

• Custody or control your funds (you maintain custody via private keys and presigned exit paths)
  
  

5. Security Model

Arkade implements three security domains:

Pre-Confirmation (Virtual Mempool). Transactions in the Virtual Mempool receive instant co-signatures from the Signer but have not yet been committed to Bitcoin. This state relies on Trusted Execution Environment isolation and economic incentives. If you detect a double-spend (two conflicting VTXOs co-signed by the Signer), you construct an unsigned burn transaction using on-chain unspent transaction outputs locked to the Signer key and submit it to the Signer via end-to-end encryption with cryptographic proof of the violation. The Trusted Execution Environment's verified behavior guarantees it will sign the burn transaction when presented with valid proof.

Bitcoin Settlement. Once your VTXO is included in a Bitcoin commitment transaction that receives confirmations, you inherit Bitcoin's full security guarantees. The VTXO becomes part of Bitcoin's immutable history.

Unilateral Exit. You exit any VTXO to Bitcoin by broadcasting the presigned transaction path from the batch output to your specific VTXO. This requires broadcasting multiple sequential Bitcoin transactions that "unroll" the virtual tree structure. Each transaction must be individually confirmed and incurs Bitcoin network fees.

Exit costs depend on tree depth and network conditions. A VTXO three levels deep requires three separate Bitcoin transactions. If your VTXO value is small and network fees are high, exit costs may exceed the VTXO value, effectively stranding those funds until network fees decrease. You are responsible for monitoring exit costs and ensuring VTXOs maintain economically viable exit paths.

Liveness Failure. If Arkade becomes unavailable, you progress state by attaching pre-confirmed VTXOs to new on-chain batch outputs. The Virtual Mempool directed acyclic graph explicitly encodes transaction dependencies, allowing you to advance from state t₀ to state tₙ by following the dependency chain. Other compatible Batcher implementations may coordinate this process.

6. Eligibility

You may use Arkade only if you can legally form binding contracts in your jurisdiction, are not barred from using Arkade under applicable law, and do not appear on any sanctions list (including the U.S. Treasury Department's Specially Designated Nationals list). If using Arkade on behalf of an entity, you represent that you have authority to bind that entity to these Terms.

7. Intellectual Property

As between you and us, Ark Labs owns Arkade, including all related intellectual property rights. We grant you a non-transferable, non-exclusive license to access and use Arkade solely as permitted by these Terms. You may not decompile, disassemble, or reverse engineer Arkade.

You retain ownership of content you submit. You grant us a limited license to use that content solely for operating Arkade.

8. Prohibited Uses

You will not:

• Violate any applicable law, including anti-money laundering laws, sanctions laws, or export control laws

• Infringe intellectual property rights

• Use Arkade in any manner that is illegal, fraudulent, misleading, or harmful

• Attempt to disrupt, attack, or interfere with Arkade's security or availability

• Use Ark Labs' trademarks without express written permission
  
  

9. Assumption of Risk

You understand and acknowledge:

VTXOs and Bitcoin Script constructions carry inherent risks. Bugs in presigned transaction structures, Trusted Execution Environment vulnerabilities, or cryptographic failures could result in loss of funds.

The Signer operates in a Trusted Execution Environment with remote attestation. While Trusted Execution Environments provide security guarantees, they are not perfect. Hardware vulnerabilities, side-channel attacks, or implementation flaws could compromise the Signer.

Unilateral exit costs vary unpredictably. Bitcoin network congestion can make exits economically infeasible for small VTXOs.

Protocol upgrades may introduce risks. Changes to Bitcoin consensus rules or Ark protocol implementations could disrupt VTXO functionality.

You are responsible for your private keys. If you lose your keys or seed phrase, you cannot access your VTXOs.

You expressly waive and release Ark Labs, its affiliates, officers, directors, employees, and agents from any liability, claims, or damages arising from your use of Arkade or interaction with VTXOs.

10. Third-Party Services

Arkade may integrate with third-party services (wallets, indexers, Bitcoin nodes). Ark Labs has no control over and is not responsible for such services. Your use of third-party services is governed by their respective terms. We do not endorse third-party services and are not liable for any loss resulting from their use.

11. Regulatory Compliance

You are responsible for determining whether your use of Arkade complies with applicable laws in your jurisdiction, including money transmission regulations, securities laws, tax obligations, and anti-money laundering requirements. Ark Labs does not provide legal or tax advice. Consult qualified professionals regarding your regulatory obligations.

Users bear sole responsibility for paying any taxes, duties, and assessments now or hereafter claimed or imposed by any governmental authority associated with their use of the services and/or payable as a result of using and/or exploiting any digital assets and interacting with smart contracts.

12. Modifications to Terms

We reserve the right to modify these Terms at any time. Your continued use after modifications become effective constitutes acceptance. If you do not agree to modified Terms, stop using Arkade immediately.

13. Warranty Disclaimers

ARKADE IS PROVIDED "AS IS" AND "AS AVAILABLE" WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED. TO THE MAXIMUM EXTENT PERMITTED BY LAW, ARK LABS DISCLAIMS ALL WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

WE DO NOT WARRANT THAT ARKADE WILL BE UNINTERRUPTED, TIMELY, SECURE, OR ERROR-FREE; ARKADE WILL BE COMPATIBLE WITH YOUR WALLET OR OTHER SOFTWARE; THE SIGNER WILL ALWAYS OPERATE CORRECTLY; BITCOIN SCRIPT EXECUTION WILL PRODUCE EXPECTED RESULTS; OR UNILATERAL EXITS WILL ALWAYS BE ECONOMICALLY FEASIBLE.

14. Limitation of Liability

TO THE MAXIMUM EXTENT PERMITTED BY LAW, ARK LABS WILL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR ANY LOSS OF PROFITS, REVENUE, DATA, OR GOODWILL, WHETHER BASED ON WARRANTY, CONTRACT, TORT, OR ANY OTHER LEGAL THEORY, EVEN IF ARK LABS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, ARK LABS' TOTAL LIABILITY ARISING FROM THESE TERMS OR YOUR USE OF ARKADE WILL NOT EXCEED THE GREATER OF (A) ANY AMOUNTS YOU PAID ARK LABS FOR USING ARKADE OR (B) ONE HUNDRED DOLLARS ($100).

THESE LIMITATIONS REFLECT THE ALLOCATION OF RISK BETWEEN YOU AND ARK LABS. SOME JURISDICTIONS DO NOT ALLOW CERTAIN LIMITATIONS, SO THE ABOVE MAY NOT APPLY TO YOU.

15. Indemnification

You will indemnify and hold Ark Labs harmless from any claims, damages, losses, and costs (including reasonable attorneys' fees) arising from your use of Arkade, your violation of these Terms, your violation of any law or third-party rights, or your negligence or willful misconduct. If you are obligated to indemnify Ark Labs, we have the right to control any action or proceeding and determine settlement terms.

16. Termination

We may suspend or terminate your access to Arkade at any time without notice. Upon termination, Sections 9 through 23 survive.

17. Governing Law

These Terms are governed by Estonian Law

18. Dispute Resolution

Before filing any claim, you must complete our Formal Complaint Process by contacting help@arklabs.xyz. If we cannot resolve your dispute within 45 business days, you may proceed to arbitration or small claims court.

19. Privacy

Our collection, use, and disclosure of personal data is governed by our Privacy Policy at arkade.computer/privacy.

20. Miscellaneous

Entire Agreement. These Terms constitute the entire agreement between you and Ark Labs regarding Arkade.

Assignment. We may assign these Terms without restriction. You may not assign these Terms without our written consent.

Severability. If any provision is unenforceable, the remaining provisions remain in effect.

No Waiver. Our failure to enforce any provision does not waive our right to enforce it later.

Relationship. Ark Labs is an independent contractor. These Terms do not create a partnership, joint venture, or agency relationship. To the fullest extent permitted by law, we owe no fiduciary duties to you.

Force Majeure. We are not liable for delays or failures caused by events beyond our reasonable control, including significant Bitcoin network disruptions, government actions, or infrastructure failures.

21. Contact

For questions about these Terms, contact legal@arklabs.xyz.