TrendX Research Institute: Analysis and Ecosystem Review of the Merlin Chain Project
According to data statistics on March 2, the total TVL of the Bitcoin Layer 2 network Merlin Chain has reached 3 billion USD. Among them, Bitcoin ecological assets account for 90.83%, including BTC worth 1.596 billion USD and BRC-20 assets worth 404 million USD.According to data statistics on March 2, the total TVL of the Bitcoin Layer 2 network MerlinChain has reached $3 billion. Among them, Bitcoin ecosystem assets account for 90.83%, including $1.596 billion worth of BTC and $404 million worth of BRC-20 assets. In the previous month, within 14 days of launching the staking activity, MerlinChain's total TVL had already reached $1.97 billion, surpassing the recently notable Blast that launched in November last year. On February 26, the total value of NFTs within the MerlinChain ecosystem exceeded $420 million, making it the highest-valued public chain project for NFTs outside of Ethereum.
Project Introduction
MerlinChain is a new BTCLayer2 solution supported by OKX, and its popularity stems from its solution directly addressing the core pain point of the Bitcoin network—scalability issues.
Merlin Chain uses ZK-Rollup to compress a large number of transaction proofs into a simple checksum to improve transaction efficiency and scalability. The sequencer nodes on it are responsible for collecting and batching transactions, generating compressed transaction data, ZK state roots, and proving through zkEVM. Then, the compressed transaction data and ZK proofs are uploaded to Bitcoin L1's Taproot via a decentralized Oracle network. This Taproot is available for the entire network to ensure transparency and security.
Team Information:
The team behind MerlinChain, BitmapTech (formerly RCSV), has long been deeply involved in the Bitcoin ecosystem, contributing multiple native innovative projects to Bitcoin over the past year, with a total market value exceeding $500 million. The BRC-420 "Blue Box" issued by BitmapTech has become one of the most popular assets in the Ordinals protocol, with its price soaring from $0.15 to $34,000, second only to BAYC and CryptoPunks in market value.
Financing Information: On February 5, Merlin Chain announced the completion of financing, with 24 institutions including OKX Ventures, ABCDE, Foresight Ventures, and Arkstream Capital participating. The specific financing amount has not yet been disclosed.
Operational Activities
- Launchpad Staking Airdrop Activity
Total supply of MERL tokens: 2,100,000,000
Sale price: 0.00004762 USDT
On February 5, MerlinChain announced that 1% of the total token supply (i.e., 21 million MERL) would be used for Launchpad through People's Launchpad, with an initial price of 0.00004762 USDT.
On February 8, MerlinChain launched a total of 6 phases of mainnet staking activities and announced that 20% of the token supply would be released for airdrops, a significantly higher proportion than the common 5% airdrop quota for L2 projects. This staking activity supports not only native BTC assets (BTC, BRC-420 assets, and BTC-20 assets) but also EVM assets (which can be deposited into Ethereum mainnet or Arbitrum assets and receive exclusive native staking rewards), and rewards can also be obtained by providing liquidity for MerlinChain's native Dex MerlinSwap.
On February 16, MerlinChain continued to launch the second phase of Merlin's Seal, increasing staking assets to include Blue Wand, Dragon Ball, and mainstream assets on ZKFair.
On February 19, MerlinChain launched the first BRC-20 token $VOYA airdrop and further increased staking assets to include NodeMonkes, BitcoinPuppets, BitcoinFrogs, etc.
Image source: Zhihu Column Crypto Dongge
- Interactive Cooperation
On February 13, the full-chain liquidity distribution network StakeStone established a strategic partnership with MerlinChain. It provides staking and upcoming Restaking rewards for ETH staked by users in the MerlinSeal activity.
On February 16, the Bitcoin Layer 2 network MAPProtocol reached a cooperation with MerlinChain to bring Bitcoin-level peer-to-peer cross-chain interoperability between Bitcoin L2s and between different Bitcoin L2s and EVM ecosystems.
On February 21, the BTC native stablecoin protocol bitSmiley and the BTCLayer2 network MerlinChain reached an official strategic cooperation. The native asset of bitSmiley, bitDisc-BlackNFT, joined the MerlinSeal activity, becoming one of the BTC assets recognized in Merlin's mainnet activities.
On February 26, the crypto exchange BIT announced a partnership with MerlinChain, serving as the official custodian to support users in staking ETHS assets on MerlinChain, becoming the exclusive channel for users to stake ETHS and accumulate airdrop M points.
On February 27, OKX Web3 wallet officially announced the integration of the MerlinChain network, allowing users to switch to the MerlinChain network with one click without manual configuration for managing corresponding tokens. Additionally, users can discover and interact with MerlinChain network ecosystem DApps in the OKX Web3 wallet discovery section.
On February 27, TRON announced a strategic cooperation with MerlinChain, with both parties committed to expanding Bitcoin's interoperability, usability, and financial accessibility.
- KOL Operation Maintenance
The MerlinChain team is also very proactive and enthusiastic in maintaining KOL operations. The rapid start of MerlinChain is partly due to the positive development of the Bitcoin chain environment and partly due to the project team's textbook-like operational methods. The focus of the project team has always been on the community, and the 20% airdrop ratio along with KOL promotion are the most efficient ways to ignite community enthusiasm.
Ecosystem Overview
Through excellent operational activities, a large number of players and attention have been attracted, and the team's construction of MerlinChain is continuously being enriched. Currently, there are six projects deployed on the network:
Cross-Chain Bridge:
Official cross-chain bridge MerlinBridge: This is the official cross-chain bridge project of MerlinChain, currently supporting a rich variety of assets to be staked in MerlinSeal.
Third-party stablecoin cross-chain bridge Meson: Meson is a stablecoin trading protocol that facilitates the free flow of stablecoins between Ethereum, Layer 2, and major high-performance public chains. With its innovative product design and technology stack, Meson offers significant advantages in terms of fast confirmation, low fees, and zero slippage for peer-to-peer trading of major stablecoins across any supported network.
Related link: https://app.trendx.tech/project/d4fc3b1a76151dfbccdb35469defae2555268f544a83ae10d397821f073b533e
Swap
MerlinSwap: This is the official DEX of MerlinChain. According to the official white paper, it has the following four features:
Revolutionary DL-AMMDEX: Utilizes cutting-edge liquidity algorithms for fast and efficient asset swaps, thereby improving capital efficiency and optimizing yields.
Adaptive liquidity mining: Provides static and dynamic liquidity mining options, allowing users to implement dual incentives across any price range, thus minimizing unused liquidity.
CEX-level user experience: Offers an interface that reflects the efficiency and simplicity of centralized exchanges, adapted to a decentralized environment.
Cross-chain operation: MerlinSwap supports interoperability with other chains, allowing users to trade across different blockchains and enjoy the convenience of cross-chain trading.
Additionally, the current product services provided by MerlinSwap include:
Limit orders: Echoing CEX orders, this feature allows users to execute trades with greater precision and control.
Enhanced gas trading efficiency: Utilizing MerlinChain to cut down on gas fees, ensuring a more effective trading experience.
CEX-comparable user experience: An intuitive and familiar interface helps facilitate a seamless transition from centralized trading platforms to decentralized trading platforms.
Related link: https://app.trendx.tech/project/fac31fc1908531d9187fe94fc8d30fa0ff624d8cf7d384e46fa193a1d9b59f0e
MEME Tokens:
$VOYA:
$VOYA is the first fairly launched BRC-20 token on the Merlin chain. $VOYA serves as an important link between Merlin Chain and BRC-20, with the project team planning to airdrop a total of 10 million $VOYA tokens to early supporters of Merlin Chain through MerlinSwap, encouraging adventurers to join the Grand Voyage and explore the unknown realms of MerlinChain together.
$HUHU:
HUHU is a "dog coin" project on Merlin Chain. Holding a certain amount of $HUHU tokens allows participation in the $VOYA token airdrop activity. The conditions for receiving the $VOYA token airdrop are one of three options, one of which is holding HUHU assets in the on-chain wallet on Merlin Chain: a total of 140K $HUHU or the number of HUHU tokens in the HUHU-BTC LP * 0.00000007 + BTC value reaching or exceeding 0.01 $BTC.
Gamefi:
MerlinLand (ERC1420)
MerlinLand is a GameFi token inscription exchange protocol built on MerlinChain, creating the ERC-1420 protocol standard while being compatible with BTC (L1), BRC-420, and Bitmap assets. Additionally, MerlinLand utilizes spatial axis positioning and metadata writing features, making its protocol a programmable sandbox metaverse.
On February 27, MerlinLand announced that the MLAPP based on land metadata construction has officially launched.
Project Risk Warning
The time required for user assets to transfer from other chains to Merlin Chain is within a normal range, but if you want to move assets from Merlin Chain to other chains, you need to wait for 2 days or several days.
After participating in the Merlinseal staking activity, assets are staked and cannot be moved out. You need to wait for the official mapping of tokens to users' wallets in March or April before they can be used in various project products within the Merlin ecosystem.
The internal proportion of the 20% token airdrop is questionable. Many suspected investors or project addresses have staked large amounts of funds early on (staking in their own addresses, without facing the same funding security risks as retail investors). According to the airdrop rules, if airdrops are distributed based on points proportion, they will receive most of the airdrop, while retail investors will receive a very low proportion of the airdrop.
Lack of official information. In February, Merlin Chain was very active, but the information on the official Twitter often lagged behind community KOL news, which is very disadvantageous for retail investors. It is understandable that there are many promotional collaborations with KOLs at the project's initial stage, and many KOLs can obtain first-hand information, but there is still room for improvement in the channels for retail investors to obtain information. Users following KOLs for short-term benefits can only yield short-term results; cultivating user trust in the official source is the cornerstone for a project to go further.
