Merlin Chain founder Jeff: Capacity expansion, interest generation and asset swaps, how Merlin native innovation empowers the Bitcoin ecosystem

At the BitcoinAsia conference in May, Merlin Chain founder Jeff delivered a speech titled "Native Innovation from Bitcoin L1 to Merlin Chain", reviewing the evolution of the Bitcoin ecosystem and exploring in depth how Merlin Chain's native innovation will promote the development of the Bitcoin ecosystem.

The following is the full text of the speech, compiled based on the on-site recording.

Before 2023, Bitcoin was always seen as digital gold for value storage, and no builders were creating new concepts and applications around Bitcoin. But after the Ordinals craze in mid-23, more and more people began to create NFT-related content on the Bitcoin network, issuing assets such as BRC-20, BRC-420, and ORC-20, and then Atomicals and Runes also entered everyone's field of vision. People gradually discovered that there were many things that could be done on the Bitcoin network, and more and more voices were heard, and discussions began to be held on the expansion and re-staking of the Bitcoin network.

Subsequently, IDO, fair launch and other activities brought Bitcoin assets to Layer2. Merlin started preparing for Layer2-related matters in February this year, and heard many voices saying that Bitcoin Layer2 is not practical, a scam, etc. But in fact, there are many Bitcoin Layer2s now, and there are also many supporters and builders in our industry, all of whom are using EVM and similar Bridge technologies. My point of view is that users have a strong demand for Bitcoin Layer2, and they hope to trade Bitcoin ecosystem assets faster and at a lower cost. Merlin wants to bring new possibilities to the entire ecosystem and empower Layer1 assets, that is, if you hold Runes, BRC-20, NFT and other assets on Layer1, what Merlin wants to do is to enable these assets to play a unique value in DeFi, GameFi, SocialFi and other fields.

Merlin’s Phantom Token Swap

We have brought many new ideas to the entire Bitcoin ecosystem. Merlin’s Phantom will be officially launched this month, and we will be able to freely exchange NFTs with tokens, Runes with BRC-20 and other assets. We will define various permissionless asset swaps through standardized contracts. For example, you can define a standard for exchanging NFTs for tokens, and then you can freely stake these tokens to become an LP to earn income. I can also exchange 10,000 MERLs for NFTs and hold them. Of course, these assets can also be exchanged back at any time. Therefore, I believe that although assets are born in Layer1, Layer2 is where these assets can be freely traded, exchanged, and so on. In fact, Layer2 has unlimited possibilities.

Merlin Yields: Introducing Low-Risk Yields to Bitcoin on Hold

This chart shows the data for the Merlin BTC Bridge. In the past month, a total of 163,400 Bitcoins have been transferred in and out of Merlin, equivalent to 10.167 billion USD. Looking at the Bitcoin transaction records of all cross-chain bridges and exchanges such as OKX and Binance, I don’t think any platform can exceed this number. We have a transaction volume of more than 10 million times, a total of millions of users, and our cross-chain bridge can run smoothly without any errors during the transfer process, which is the fundamental guarantee for us to introduce Bitcoin into the EVM ecosystem.

Now, if you hold one Bitcoin in Layer1 or Binance, you will still have only one Bitcoin in your address at the end of this year. But if you hold one Merlin Bitcoin, what will be your balance at the end of the year? I mean, unless the Bridge is no longer functioning properly or there are other security issues, the BTC in your hands will exceed 1 due to the added value of the Merlin network.

First of all, for staking, we have cooperated with many projects and will also open our PoS system. Therefore, if you hold a Merlin BTC and participate in staking, after the lock-up period ends, not only will the staked Bitcoin receive additional income, you will also receive additional network incentives and token airdrops from all cooperative projects. For the Bitcoin stakers of Merlin’s Seal, they received the airdrop of MERL at the highest APY of 120%.

Secondly, if you stake Merlin Bitcoin on projects such as StakeStone or Solv, you will undoubtedly receive tokens from these projects, and you will also be able to obtain additional staking points and project tokens through Babylon re-staking. In addition, you will also obtain fund agency income through other agents such as Antalpha, that is, 50% BTC APY from CEXs such as Binance.

Finally, there are many application scenarios for SolvBTC exchanged by staking Merlin BTC on Solv Protocol. We have already cooperated with 10 Ethereum Layer2s and will announce cooperation with networks such as Linea, ZKLink, Arbitrum, etc. in the near future. You can also obtain re-staking income by introducing SolvBTC to other Layer2 networks. Since other ecosystems are in urgent need of Bitcoin ecosystem users and transaction volume, but they have no choice in terms of liquidity acquisition, cooperation with Ethereum Layer2 is a natural choice for the ecosystem.

I think all the above benefits are very important for Bitcoin. Bitcoin should not be just for holding. What Merlin is doing now is to introduce low-risk returns to Bitcoin on the basis of holding. In short, I think all the innovations that have taken place on Bitcoin Layer1 and Layer2 are very important. I am also very happy to see that there are so many builders in the ecosystem working with us. We are all fellow travelers who want to introduce these fun things into the Bitcoin ecosystem.

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