Merlin Chain marks a significant advancement in the Bitcoin Layer 2 ecosystem, which has seen considerable growth over the past month. The total locked value in Merlin Chain soared to $777.3 million, as of writing, from $5 million on March 9.
As a subsidiary of Bitmap Tech, a company renowned for its innovations, Merlin Chain introduces a scalable solution designed to enhance Bitcoin’s efficiency and applicability.
Let’s get into more detail about Merlin chain:
Overview of Merlin Chain
Merlin Chain is a Layer 2 protocol built on Bitcoin that aims to improve Bitcoin’s scalability and efficiency.
By leveraging a decentralized oracle network, on-chain BTC fraud-proof modules, and zero-knowledge (ZK) rollups, it intends to elevate Bitcoin’s native assets, protocols, and products from Layer 1 through its Layer 2 network. The overarching goal of Merlin Chain is encapsulated in its motto, “Making Bitcoin Fun Again.”
Working of Merlin Layer-2
Decentralized Oracle Network and ZK-Rollups
The core of Merlin Chain’s scaling solution is its innovative use of zero-knowledge rollups (ZK-rollups). This technology enables the platform to process large volumes of transactions quickly and efficiently by rolling multiple transactions into a single batch.
Following batch validation, zero-knowledge proofs are used to ensure the accuracy and integrity of transactions without revealing any underlying information. These proofs are generated and submitted to Bitcoin’s base layer by sequencer nodes, operators tasked with the creation and management of these proofs.
Sequencer nodes play a dual role, also responsible for bundling transactions into compressed blocks of data, thereby reducing the blockchain’s load and enhancing throughput. Once validated, these transactions achieve finality on Bitcoin’s base layer, ensuring they benefit from the same level of security and decentralization as Bitcoin itself.
Oracle Network and Fraud-Proof Modules
The oracle network within Merlin Chain consists of nodes that form a Data Availability Committee (DAC). These nodes confirm the proper handling of transaction data they receive from the sequencer nodes.
To maintain network integrity and trust, oracle nodes must stake BTC, which can be forfeited in the event they submit or validate incorrect information. By combining this staking mechanism with on-chain BTC fraud-proof modules, users can challenge the validity of ZK proofs and batched data. If a challenge is successful, the responsible node faces penalties, including the loss of a portion of their staked BTC.
BTC Connect
One of the most significant challenges addressed by Merlin Chain is enabling Bitcoin users to interact with Ethereum’s rich ecosystem of decentralized applications (dApps).
To bridge this gap, Merlin Chain utilizes BTC Connect, a technology developed by Particle Network. This tool allows Bitcoin-native wallets to engage with EVM-compatible dApps without the need to switch to an EVM-compatible wallet, thereby breaking down barriers between these two leading blockchain ecosystems.
Smart Contract Execution on Merlin Chain
Merlin Chain’s compatibility with the Ethereum Virtual Machine (EVM) means that developers can write, deploy, and manage Ethereum smart contracts on the Merlin Chain. This is facilitated by integrating established development frameworks and tools such as OpenZeppelin and Hardhat.
With OpenZeppelin, you can create secure smart contracts and integrate them directly with Remix or any other Integrated Development Environment (IDE) by pressing the “Open in Remix” button.
MERL Token and Investors
The MERL token, a BRC-20 standard token, serves as the governance token for Merlin Chain.
With a total and maximum supply of 2.1 billion tokens, MERL allows holders to participate in governance decisions, pay for transaction fees, and engage in the platform’s development.
A portion of these tokens was distributed during Merlin’s Seal fair launch event, emphasizing community involvement and decentralized governance.
Among Merlin Chain’s investors are OKX Ventures, Foresight Ventures, Antalpha Ventures, KuCoin, ArkStream Capital.
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