1. Overview of #Merlin_Chain
Merlin Chain is a Layer 2 (L2) solution built on the Bitcoin blockchain, launched in June 2023, aimed at enhancing scalability, reducing transaction costs, and speeding up transaction processing on the Bitcoin network. The project utilizes ZK-Rollup technology, integrates a decentralized oracle network, and employs anti-fraud mechanisms (fraud proof) to ensure transparency, security, and performance. Merlin Chain aims to “Make Bitcoin Fun Again” by supporting the development of applications and assets on Bitcoin Layer 1 through Layer 2, while also being compatible with the Ethereum Virtual Machine (EVM) to facilitate developers in easily migrating smart contracts from other EVM chains to Merlin Chain.
Key features:
• Improved scalability: Merlin Chain addresses the issue of Bitcoin network congestion, particularly in the context of rising transaction fees due to activities like Bitcoin Ordinals and BRC-20 tokens.
• Supports a variety of assets: Supports token standards such as BRC-20, BRC-420, Bitmap, Atomicals, Pipe, Stamp, allowing developers to create and customize applications according to needs.
• Ecosystem integration: Merlin Chain is compatible with applications such as iZUMi Finance, Meson, Polyhedra Network, Bitmap Game, Bitmap War, and native DeFi applications such as Mineral, promoting the development of the Bitcoin ecosystem.
• Bridge: The project offers the Merlin Chain Bridge feature (currently in testing phase), allowing the transfer of BTC from Bitcoin Layer 1 to Merlin Chain Layer 2 and vice versa.
2. Technology of Merlin Chain
Merlin Chain utilizes several advanced technologies to optimize performance and security:
• ZK-Rollup: Zero-Knowledge Rollup technology helps aggregate thousands of Bitcoin transactions into a single transaction on the main chain, alleviating the load on the Bitcoin blockchain, increasing transaction speed and reducing gas costs. Notably, the “zero-knowledge” aspect ensures the privacy of transactions.
• Decentralized Oracle Network: Provides reliable data for smart contracts, especially important for DeFi applications requiring accurate price data. Data is provided through Celestia and Lumoz’s decentralized ZKP computing network.
• Anti-fraud mechanism (BTC Fraud Proof): Enhances security by using on-chain fraud proof modules on Bitcoin, ensuring transaction integrity.
• EVM compatibility: Merlin Chain supports developers in migrating smart contracts from EVM chains (like Ethereum) to Merlin without rewriting code, saving time and costs.
• Infrastructure: Built on Polygon's ZK technology, combined with Lumoz's decentralized ZKP computing network, ensuring efficient data processing.
3. Token #MERL and Tokenomics
MERL is the governance and utility token of Merlin Chain, operating on this Layer 2 platform. Below are detailed information about the token:
• Total supply: 2,100,000,000 MERL.
• Market capitalization: As of recently, the market capitalization of MERL is approximately 240.28 million USD.
• Current price: According to CoinMarketCap (as of October 2, 2024), the price of MERL is around 9,434.65 VND (approximately 0.38 USD), with a 24-hour trading volume of 589,635,777,404 VND.
• Use of the MERL token:
• Governance: MERL holders have the right to vote to guide the development of Merlin Chain.
• Staking: Users can stake MERL to enhance network security or operate collators (transaction processing nodes).
• Gas fee payments: MERL is used to pay transaction fees on Merlin Layer 3.
• Liquidity and collateral assets: MERL can be used to increase liquidity in the ecosystem or serve as collateral in DeFi transactions.
• Airdrop of Merlin’s Seal: 20% of the total MERL supply (approximately 420,000,000 tokens) is allocated to the Merlin’s Seal program, where users can stake assets like BTC, ETH, USDT, USDC, or BRC-20/BRC-420 tokens to accumulate M-Points and exchange for MERL tokens.
Note: Some previous sources (in 2021) referred to MERL as a token on Binance Smart Chain (BSC) with an unlimited total supply mechanism related to yield farming. However, this information seems to pertain to a different project named “Merlin” (Merlin Lab), not Merlin Chain. To avoid confusion, focus on information from 2023-2024 related to Merlin Chain.
4. Ecosystem and Applications
Merlin Chain aims to build a diverse ecosystem including DeFi, GameFi, SocialFi, and other applications on the Bitcoin platform. Some applications and protocols integrated with Merlin Chain include:
• iZUMi Finance: A DeFi platform providing liquidity solutions.
• Meson: Cross-chain protocol.
• Polyhedra Network: Identity and privacy solutions.
• Bitmap Game, Bitmap War: GameFi applications related to the BRC-420 “Blue Box” collection from Bitmap Tech.
• Mineral: A native DeFi application utilizing the BRC-420 standard.
Merlin Chain supports assets such as BTC, ETH, USDT, USDC, and BRC-20/BRC-420 tokens, facilitating the development of financial and gaming applications on the Bitcoin network.
5. Team and Investors
• Development team: Merlin Chain is developed by Bitmap Tech, a team experienced in the Bitcoin ecosystem, known for Bitmap Explorer and the BRC-420 collection “Blue Box”, one of the trending assets on Bitcoin Ordinals with a total market capitalization exceeding 500 million USD. The head of Bitmap Tech is Jeff, an entrepreneur with experience in the Web2 field who transitioned to Web3 in 2023, inspired by the potential of Bitcoin Ordinals.
• Investors: Merlin Chain has received investment from several major funds in the blockchain industry, including:
• OKX Ventures
• ABCDE
• Foresight Ventures
• Arkstream Capital
• KuCoin Labs
• And over 20 other investment funds. However, the total amount raised has not been publicly disclosed.
• Funding round: In February 2024, Merlin Chain announced a funding round with participation from 24 investors, but details about the amount have not yet been disclosed.
• Ecosystem funding program: Merlin Chain has announced a 210 million USD funding program to support developers, projects, and initiatives within the ecosystem, aimed at fostering innovation and expansion.
6. Achievements and Metrics
• Total Value Locked (TVL): Merlin Chain has attracted about 3 billion USD TVL, indicating strong acceptance from the Bitcoin community. According to GeniiData, the TVL of the Bitcoin ecosystem has increased from 500 million USD to over 2.5 billion USD in a few months, with Merlin Chain playing a crucial role.
• Network activity: After more than two months since the mainnet launch, Merlin Chain recorded:
• Over 2.2 million wallets.
• Over 10 million transactions.
• Merlin’s Seal event: This program allows users to stake assets to earn M-Point and receive MERL airdrop. The event runs from February to April 2024, with rewards including 20% of the total MERL supply and profits from DeFi protocols.
7. Guide to participate in Merlin Chain
To participate in Merlin Chain, especially in the Merlin’s Seal event, users can follow these steps:
1. Create a wallet: Use a wallet like Unisat Wallet to interact with Merlin Chain.
2. Access Merlin Chain Bridge: Go to https://merlinchain.io/bridge/staking and connect your wallet.
3. Select network and assets: Choose the network to transfer assets (BTC, ETH, USDT, USDC, or BRC-20/BRC-420 tokens) to Merlin Chain.
4. Stake assets: Select “Stake” to start accumulating M-Point.
5. Check M-Point: Check the accumulated points to exchange for MERL tokens.
8. Highlights and Potential
• Strengths:
• Addresses the issue of congestion and high fees on the Bitcoin network, especially in the context of Bitcoin Ordinals and BRC-20 putting significant pressure on the network.
• Integration of ZK-Rollup technology and decentralized oracles, providing high performance and strong security.
• Supports a diverse range of applications and assets, expanding the Bitcoin ecosystem.
• Backed by major funds and developed by a reputable team from Bitmap Tech.
• Potential:
• With the Bitcoin Halving event in 2024, Merlin Chain is seen as one of the notable Layer 2 projects, capable of attracting further interest from investors and users.
• The 210 million USD funding and rapidly growing TVL indicate long-term growth potential.
9. Note
• Risks: Although Merlin Chain has significant potential, the cryptocurrency market is always volatile and carries high risks. Sources like Coin68 and Mytour emphasize that the provided information is not investment advice, and users should conduct thorough research before participating.
• Confusion with another project: It should be noted that Merlin Chain (Layer 2 on Bitcoin) is different from the Merlin Lab project (an AMM platform on Binance Smart Chain launched in 2021). Information about Merlin Lab does not apply to Merlin Chain.
10. Conclusion
Merlin Chain (MERL) is a promising Layer 2 project on Bitcoin, leveraging ZK-Rollup technology, decentralized oracles, and anti-fraud mechanisms to enhance performance and expand the Bitcoin ecosystem. With support from Bitmap Tech, major investment funds, and impressive TVL, Merlin Chain is attracting attention in the rapidly evolving Bitcoin Layer 2 landscape. However, users need to be cautious and conduct thorough research before investing or participating.