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Documentation Index

Fetch the complete documentation index at: https://second.tech/docs/llms.txt

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All VTXOs have a limited lifetime that determines when the server can claim any remaining bitcoin. Understanding VTXO lifetime is crucial for maintaining control of your bitcoin.

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What happens when VTXOs expire?

When a VTXO reaches its expiry height, the server gains the ability to sweep any remaining bitcoin to its own wallet through the timelock spend paths. Users also retain the ability to spend the VTXO or perform an emergency exit (as long as they haven’t forfeited it). This mechanism allows servers to replace liquidity deployed during the VTXO’s lifetime and prevents users from griefing servers by holding expired commitments indefinitely.
Diagram of an Ark server sweeping an expired round to its own wallet

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Avoiding expiry

Users have several options to maintain control before their VTXOs expire:
  • Spend the VTXO: Create spend VTXOs for payments (inherits the original expiration time)
  • Refresh in a round: Convert to a new refresh VTXO with a fresh lifetime
  • Cooperative exit: Work with the server to create an offboard transaction
  • Emergency exit: Broadcast all transactions in the VTXO to claim bitcoin on-chain (reserved for emergencies!)
In practice, users shouldn’t need to worry about VTXO lifetime as long as their wallet app comes online regularly. Well-designed wallet apps should implement automated policies to prevent expiry, such as prioritizing older VTXOs for spending and automatically refreshing VTXOs that approach expiry thresholds.

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Server incentives for honest behavior

While wallet apps should manage VTXO lifetime proactively, Ark servers are also strongly incentivized to operate honestly even in the rare event that a VTXO does expire. Any attempt by a server to claim non-forfeited bitcoin would be quickly identifiable by users and other observers. Such behavior would cause users to immediately offboard or exit their bitcoin, resulting in significant business losses for the server. The economic incentives therefore favor honest operation over attempting to snap up a few expired VTXOs.