Merlin Chain is a Layer 2 protocol for Bitcoin. It uses a decentralized Oracle network, on-chain BTC fraud-proof modules, and ZK rollups to make Bitcoin faster and more efficient. It also works with the Ethereum Virtual Machine (EVM) and supports Bitcoin’s own protocols like BRC-20, Stamps, BRC-420, Anatomicals, Pipe, and Bitmap.
The Merlin Chain team aims to unlock Bitcoin’s full potential by using its users, protocols, and native assets. They believe that innovations native to Bitcoin are the key, rather than trying to copy how Ethereum works. It was announced in January 2024. Its testnet bridge launched shortly after, and the mainnet started in February 2024 with a fair launch event. This event included staking activities that reached a total value locked (TVL) of $543 million in just 24 hours.
It stands out by not following the current trend of copying the Ethereum network. It works with the Ethereum Virtual Machine (EVM) but encourages users to innovate within the Bitcoin ecosystem, unlike other layer-2 technologies that are limited to Ethereum.
Unique Features of the Protocol
- Merlin Chain, the Bitcoin Layer 2 system, is ready to revolutionize the BTC ecosystem.
- It aims to utilize the full potential of the BTC network by making it more efficient and faster.
- MERL is the native token of this system, which users can use for a variety of activities.
There are numerous blockchain networks at present, with some of them showing stunning growth. However, very few of these can match the charm of Bitcoin. Though it may seem outdated compared to some newer entries, it still holds the glamor of being the first cryptocurrency. Merlin Chain is a crypto project on layer 2. It aims to fix Bitcoin’s problems and make it work better.
It is the latest addition to the Bitcoin Layer 2 system, which has been very busy lately. It is a prime mover in the new developments of the BTC network; thus, it is necessary to make the most of BTC.
Locating The Creative Force Behind It
Bitmap Tech, formerly known as Recursiverse, is the creative force behind Merlin Chain. Before Merlin Chain, the company developed BRC-420 and Bitmap games. BRC-420 is a standard for more complex inscription formats used in metaverses. In January 2024, Bitmap Tech reported that Bitmap. Game, a metaverse on Bitcoin, had over 30,000 users and a market cap all-time high floor price of $290 million. In February 2024, Merlin Chain secured funding from OKX Ventures, ArkStream Capital, ABCDE, Foresight Ventures, and 20 other investors. The exact amount raised is not disclosed.
Understanding Its Working Principle
Merlin Chain works with the aim of improving the BTC network. To do this, it works through a system which comprises of various components:
zkEVM:
Merlin Chain uses zkEVM to scale Bitcoin. It is like Ethereum’s EVM but with zero-knowledge proofs for validating state changes from transactions. Sequencer nodes create these proofs, bundle transactions into compressed blocks, and send them with proofs to Bitcoin’s base layer through an Oracle network. All transactions on Merlin Chain settle on the base layer, ensuring security and decentralization.
Oracle Network:
Merlin Chain’s Oracle network acts as a Data Availability Committee. It confirms transaction data. Nodes in this network stake BTC to participate, ensuring honesty. Users can challenge proofs, penalizing dishonest nodes by reducing their staked BTC.
ZK-Rollups:
ZK-rollups compress transaction data, reducing costs and speeding up transactions. Its block time is approximately 1.2 seconds, which is much faster than Bitcoin’s.
BTC Connect:
Bitcoin users can not use EVM-compatible dApps on Merlin Chain due to wallet limitations. Bitmap Tech solves this with BTC Connect, allowing Bitcoin wallets to interact with EVM dApps through an SDK provided by Particle Network.
Bridging:
Merlin Chain uses a bridge for asset transfers between Layer 1 (Bitcoin) and Layer 2 (Merlin Chain). When bridging from Layer 1, BTC is locked, and MBTC is minted on Layer 2. When bridging back, MBTC is burned, and locked BTC is released. Currently, only BTC is supported, but more assets may be added soon.
Understanding The Features
Merlin Chain offers unique features that set it apart from other technologies. After all, nothing survives without unique offerings:
Zero Knowledge (ZK) rollup:
This feature reduces gas fees, speeds up transactions, and decreases congestion in the blockchain network. It works by computing and verifying data in the layer 2 network, while recording transaction proof in the layer-1 network, ensuring network security and accountability.
Fraud-proof:
It also uses on-scale fraud-proof mechanisms to double-check transaction proofs verified by ZK-rollup, ensuring data accuracy on the network.
Segregated Oracle network:
Moreover, it also employs a decentralized Oracle Network (DON) to access external data sources. This allows Web3 smart contracts to access additional data needed for faster processing in the Merlin Chain network.
The Original Token
MERL is a special token that lets users do many things on the Merlin Chain. It is used for governance, transactions, and voting. There are 2.1 billion MERL tokens in total on the Merlin Chain, and some are given as rewards to users. Interestingly, users can perform a number of tasks with the MERL:
- Voting: MERL holders can vote on important decisions on the Merlin Chain.
- Staking: You can stake MERL to make the network safer and earn passive rewards.
- Transaction fees: MERL is used as a fee for any action on the network.
- Platform control: Token holders can shape how the platform works by taking part in its activities.
- Collateral: MERL tokens can be used as collateral to get loans on the network.
Final Words
Therefore, Merlin Chain emerges as a groundbreaking solution to the scalability challenges faced by the Bitcoin ecosystem. It is paving the way for developers to unleash their creativity and drive impactful innovations. By addressing scalability issues effectively, Merlin Chain establishes a robust foundation. It is this foundation that will support the future growth and sustainability of the Bitcoin ecosystem. At present, it is necessary to be equipped with an understanding of Merlin Chain’s significance to make the most of the BTC ecosystem.
