A VTXO (virtual UTXO) is the unit of value in the Ark protocol. Many users share one on-chain output. Each user's share is represented by a branch of pre-signed transactions that leads from that shared output to an output only they control.
Spending it
Normally you spend a VTXO off-chain, with the help of the Ark operator. If the operator disappears, you can broadcast your branch to exit on-chain yourself.
Expiry
VTXOs expire under an absolute timelock. After that, the operator can also spend the shared coins. To stay trustless, users must refresh their VTXOs into a new round before expiry.