Understanding the investment opportunities of the recent hot Merlin Chain in one article

[TL;DR]:

From a global perspective, since the emergence of the spillover effect of Ordinal Summer, the market has been 比特币 The second layer solution (L2), or sidechain, has shown a strong demand.

With seamless inion experience on multiple chains, fair launch mechanism, and huge traffic from Bitmap, Merlin Chain has become a hot project in the recent Bitcoin eco.

With the expansion of BRC420 user base and the official launch of the Merlin Chain mainnet, important applications such as DeFi, games, and stablecoins will also be launched successively, leaving broad space and infinite possibilities for future innovation and development.

Introduction

We rarely write about a specific new project in the Gate blog, on the contrary, we prefer to interpret the hot trends for you from a macro perspective, but the recent projects related to the Bitcoin eco have indeed been a hot track in this round of bull market, and we have discussed the direction of the inion many times, and this article will introduce you to the dynamics of scaling solutions - a new popular project, Merlin Chain.

Merlin’s highly popular narrative background

From a global perspective, since the emergence of the overflow effect from Ordinal Summer, the market has shown a strong desire for Bitcoin’s second-layer solution (L2, also known as sidechain).

Old projects like sidechain Stacks Off-chain networks such as RGB and joint sidechains like RSK have made significant progress in their respective fields, and the emergence of new L2 projects heralds a new peak of market enthusiasm.

Regardless of whether the technological paths of these projects can ultimately become mainstream or whether they can withstand scrutiny in terms of actual security, market sentiment has clearly pointed in this direction.
Figure 1 Source: Foresight News

In the next generation of L2 projects, there are two main strategic paths. The first is to first build the infrastructure of Layer 2 and then develop the eco and deploy projects on top of it. This pattern of going from infrastructure to applications is expected to be the choice for most L2 projects.

And the other path is the opposite, it first owns L1 assets and then builds an L2 chain to further expand the financial capabilities of these assets. Merlin Chain is a typical representative of this model.

It is worth mentioning the Meilin Chain team. The Bitmap Tech (formerly known as Recursiverse) team has been deeply involved in the underlying eco of Bitcoin for several months, and its product line includes Bitmap.Game (i.e. Bitmap Metaverse), BRC-420 Protocol (an asset protocol based on modular data), and Recursiverse (a product matrix based on recursive protocol).

During this period of time, the market value of Bitmap Tech has significantly increased from $3 million to a peak of $290 million. At the same time, the core asset of BRC-420, the Blue Box, has seen its engraved cost rise from $0.15 to a peak of $26,000.

In addition, Bitmap and BRC-420 have also performed strongly in terms of user base, becoming leaders on BTC L1. Specifically, Bitmap has over 30,000 holding addresses, while BRC-420 has gathered 1000+ developers.

Source: Cointelegraph, Figure 2

On this basis, Bitmap Tech has launched the Bitcoin Layer 2 solution Merlin Chain, aiming to extend the assets and protocol innovations of the Bitcoin Layer 1 to Layer 2, thereby exploring new points of asset growth. This move demonstrates Bitmap Tech’s determination and ambition in expanding the Bitcoin eco and enhancing asset value.

Is the Merlin Chain ‘fire’ real and practical?

Merlin Chain is a Bitcoin Layer2 solution that integrates ZK-Rollup network, decentralized oracle network, and on-chain BTC anti-fraud module. Its core goal is to activate native assets, protocols, and products on Bitcoin Layer1 through Layer2 network, injecting new vitality and fun into the Bitcoin eco.

According to the official announcement from Merlin, the network will widely support mainstream protocols on the Bitcoin layer, including but not limited to BRC-20, Bitmap, BRC-420, Atomicals, SRC20, and Pipe. This compatibility ensures that users can retain their investments and assets on Layer1 when migrating to Layer2.

It is worth mentioning that Merlin Chain decided to use the Bitcoin wallet as the main means of controlling the second layer when building the Layer2 network. This means that users can still use the same wallet in Layer2 when using the Unisat/OKX wallet in Layer1, and even the transfer address remains the same. This design simplifies the user experience and avoids the tedious process of switching between multiple chains.

In order to further achieve a seamless user experience, Merlin has partnered with Particle Network to launch the BTC Connect component. This component allows users to maintain wallet and address consistency between Layer1 and Layer2, achieving seamless connection between multiple chains.

Although the interaction of Bitcoin Layer 1 may have a certain threshold for new users, which limits the influx of new funds, Merlin Chain aims to be the “starting point” for users through its Layer 2 solution. Whether it is depositing BTC or other tokens such as USDT/USDC/ETH/. BNB All users can experience the native gameplay of Bitcoin on Merlin Chain.

In addition, Merlin Chain plans to connect to the first multi-chain engraved DApp, allowing users to engrave Layer 1 assets, including Bitcoin, on the Layer 2 network. At the same time, the issuance/Launchpad of the most core assets on Bitcoin will also be available on Merlin, providing users with more convenient and cost-effective opportunities to purchase assets such as BRC-20/BRC-420/Atomicals/Runes.

Of course, the above are all innovative designs at the technical level, but what really ignites the market focus is the project’s fair launch mechanism.
Figure 3 Source: @Merlin Chain

The official plan is to release most of the governance tokens to the community and users, practice decentralized governance, and adopt a solution similar to Blast in the initial launch, implementing the People’s Launchpad. The initial market value of only $100,000 has quickly increased the market’s attention with huge potential.

Bull Market Thinking brought by Merlin Chain

Last year, the Bitcoin eco demonstrated an unprecedented vitality and wave of innovation. Throughout the year, a combination of asset innovation, protocol innovation, and application innovation emerged like mushrooms after the rain, injecting new vitality into the entire industry.

Although the track is booming, the current market value of BRC assets accounts for only 0.5% of the market value of Bitcoin, which is just the beginning, indicating that more potential for Bitcoin-native innovations is waiting to be discovered.

The recent introduction of the Bitcoin sidechain Merlin Chain by BRC420 has undoubtedly become the focus of industry attention. In terms of cross-chain implementation, Merlin Chain has chosen the MPC solution of the cobo wallet. Although this choice is relatively conservative because the number of signers in MPC is relatively small, there is a certain gap in security compared to BTC’s multi-signature after the Taproot upgrade. However, it is worth mentioning that MPC has undergone long-term verification to ensure its stability and reliability.

Another highlight is that, in order to improve user experience, Merlin Chain has partnered with ParticleNtwrk to introduce the concept of account abstraction. This means that users can continue to interact with sidechains using their familiar Bitcoin wallets and addresses, without changing their existing usage habits. This design undoubtedly brings great convenience to users, compared to requiring Bitcoin users to readapt to interaction methods such as Metamask, Merlin Chain’s choice is undoubtedly more intimate and user-friendly.

At the same time, as the popularity of BRC420 and Bitmap continues to rise, they have attracted a large number of users. Based on this, Merlin Chain continues to innovate around the inion business. It not only supports multiple inion asset engraving and transactions across L1 chains, but also implements a fair launch plan that has attracted a lot of attention.
Image 4 Source: Paritcle Network

Overall, although the Bitcoin Layer 2 solution has not yet attracted enough attention, its potential cannot be ignored. By issuing assets through a fair minting method and combining with the L2’s low-cost and high-efficiency operation mechanism, the future market may undergo disruptive changes. With the expansion of BRC420 user base and the official launch of the Merlin Chain mainnet, important applications such as DeFi, games, stablecoins, etc., will also be launched successively, leaving broad space and endless possibilities for future innovation and development.