Merlin Chain assets are all unpledged, where will the 3.8 billion US dollars of liquidity go?

Original source: Merlin Chain

Since the launch of the Bitcoin second-layer network Merlin Chain in February, it has focused on the liquidity of more than 3.8 billion US dollars TVL in the Bitcoin ecosystem, attracting widespread attention from the outside world. Last week, Merlin officially announced that all Merlin's Seal assets can be unpledged. Unlike the rapid shrinkage of liquidity that public chains often face at this stage, a new milestone in the Merlin ecosystem is gradually being built. Judging from the on-chain data, its top dApps have recently performed well in various dimensions such as TVL, transaction volume and active addresses. This article will review the recent trends of the Merlin ecosystem, share how these applications have taken over liquidity after unstaking, and provide more application scenarios for Merlin native assets (M-BTC, etc.).

Solv Protocol: The benchmark for the successful transformation of old DeFi through BTCFi

Solv Protocol is a liquidity infrastructure and structured income agreement that increases users' income in the currency standard based on the Delta neutral strategy. The team has received investments from The Spartan Group, Binance Labs, etc., with a public financing amount of US$11 million.

Ecosystem data

Data as of May 9:

· TVL: $620 million

· Active addresses on the chain: 35,000

Asset empowerment

In April this year, Solv joined the Merlin ecosystem and launched a points system and BTC Vault. Users deposited BTC through Merlin Chain, pledged it as SolvBTC, and received points rewards. SolvBTC has multiple uses and sources of income in the ecosystem, such as trading or providing liquidity in the derivatives trading protocol Surf Protocol, and obtaining interest as a fund provider in the DeFi lending protocol Avalon Finance. It is reported that Solv will provide SolvBTC holders with underlying interest-bearing BTC currency-based income through a variety of Delta neutral strategies.

Unicross: Native infrastructure of the Merlin ecosystem, Bitcoin assets can be minted and traded at low cost through the second layer

Unicross is a highly native infrastructure in the Merlin ecosystem, supporting the casting, trading and launch of BTC L1 assets on Layer2. The low-key team behind it has deep development experience in BTC Ordinals and has built the largest inscription casting platform.

Ecological data

Data as of May 9:

· Active addresses on the chain: 200,000

Asset empowerment

Unicross has done a lot of infrastructure work around the Merlin ecosystem, Bitcoin assets and community. Through Unicross, Merlin users can cast and trade BRC-20, BRC-420 and some runes on the second layer at a lower price than L1.

Surf Protocol: The largest derivatives protocol in the Bitcoin ecosystem

Surf Protocol is a decentralized derivatives trading protocol first launched on Merlin Chain. It was selected for the 7th season MVB accelerator program of Binance Labs and has received investment from institutions such as ABCDE Capital and Amber Group. Its product line not only includes derivatives trading, but also extends to pre-market trading, spot leverage trading, etc., so as to meet the different needs of users from multiple angles, and make innovations in the mechanism to adapt to the BTC ecosystem (LP single asset provides liquidity, Satoshi-based margin model, etc.).

Ecodata

Data as of May 9:

· TVL: US$29.96 million

· Total trading volume: US$220 million

· Active addresses on the chain: 11,000

Asset empowerment

Surf Protocol adopts an innovative point-to-pool trading model, with traders and LPs as counterparties. LP profits are based on the assumption that the mathematical expectation of traders' overall profits tends to 0 without considering transaction frictions. Currently, Surf Protocol's liquidity providers (LPs) have an APY of over 10%.

Dragonverse Neo: "Web3 Genshin Impact" created by the leading chain game company

Dragonverse Neo is a 3D open world game on Merlin Chain, with exquisite art and smooth graphics, and integrates popular gameplay from masterpieces such as Fantasy Beast Palu, Zelda, Genshin Impact, and Pokémon. The team behind it is MOBOX, which has been building in the field of chain games for more than 6 years. It has received investments from Binance Labs, Animoca Brand, etc., and was listed through Binance Launchpool in 2021. The joining of the leading chain game company will bring high-quality applications to Merlin Chain, as well as highly active and high-net-worth overseas game users.

Ecosystem Data

Data as of May 9:

· Total transaction volume: $27.63 million

· Active addresses on the chain: 6,631

Asset Empowerment

Dragonverse Neo is the first project in the Merlin ecosystem to launch tokens through LBP (Liquidity Bootstrapping Pool). This mechanism is characterized by fairness and decentralization, allowing the community to obtain tokens at a more reasonable price in the early stage. In terms of participation distribution, new Bitcoin users and original MOBOX game players each account for half, injecting fresh blood into both ecosystems and achieving a win-win situation. Dragonverse Neo has started liquidity mining in April, and its game Beta version will also be launched at the end of May.

Avalon Finance: Leading lending protocol with over $200 million TVL

Avalon Finance is a native lending protocol of Merlin Chain, providing one-stop deposit, lending, leverage, mining and RWA lending services. Its business includes three product lines: over-collateralized lending, lending-related derivatives trading and algorithmic stablecoins based on lending.

Ecosystem data

Data as of May 9:

· TVL: $230 million

· Active addresses on the chain: 13,000

Asset empowerment

Avalon supports lending of a variety of Merlin native assets, including MERL, M-BTC, M-ORDI, M-STONE, BTC, SolvBTC, and stablecoins such as M-USDT and M-USDC. The current lending rate of M-BTC is 9.9% per annum, and the interest rate of stablecoins is 2.5% - 4.3%.

Mage Finance: Supporting the interest-bearing of more Merlin native assets

Mage Finance is also the native DeFi lending infrastructure of Merlin Chain. Its business consists of two parts: Mage Protocol and Mage Chain. Mage Protocol adopts a hub-and-spoke model to enable BTC assets to achieve passive income and instant loans. Mage Chain, as an L3 application chain, improves the security of CeFi through ZK proof, decentralized CeFi ledger and interoperability with Mage Protocol.

Ecosystem data

Data as of May 9:

· TVL: $83.53 million

· Active addresses on the chain: 4,936

Asset empowerment

In addition to mainstream blue-chip assets, Mage Finance supports lending of Merlin ecosystem MEME assets such as VOYA and HUHU. Recently, Mage Finance launched an airdrop event, providing rewards such as MERL tokens and Mage token quotas.

Merlin Swap: A native DEX with 320,000 active addresses on the chain

Merlin Swap is a native decentralized exchange that provides DaaS (DEX as a Service) for the Merlin Chain ecosystem. Through the liquidity algorithm of the DL-AMM model, it conducts fast and efficient asset swaps to improve asset utilization and optimize returns. In addition, Merlin Swap provides users with static and dynamic liquidity mining options, allowing users to implement dual incentives within any price range, thereby minimizing unused liquidity.

Eco-data

Data as of May 9:

· TVL: $93.72 million

· Total transaction volume: $790 million

· Active addresses on the chain: 320,000

Asset empowerment

MerlinSwap supports the trading of almost all assets of Merlin Chain (including M-Token, MERL, Runes, etc.). Judging from the transaction volume in the past 24 hours, various assets have maintained stable liquidity. At present, MerlinSwap has accumulated more than 300,000 active addresses on the chain.

Merlin Starter: The largest IDO ever launched on the chain

Merlin Starter is the native Launchpad of Merlin Chain.

Ecosystem Data

Data as of May 9:

· Total transaction volume: $880 million

· Active addresses on the chain: 52,000

Asset empowerment

Previous IDO over-subscriptions on Merlin Starter have all achieved impressive results. The first phase of IDO token $MP raised more than $490 million, with 52,000 participating addresses; the second phase of IDO token $MSTAR raised more than $390 million, with 31,000 participating addresses.

When the tide recedes, the ecosystem is the heart of the public chain

Data shows that more than half a month after the full-line assets were unpledged, Merlin Chain's liquidity of more than $3.8 billion did not flow from the ecosystem, but instead poured into its ecosystem dApps, developing rapidly in DeFi, infrastructure, games and other tracks. At present, the overall TVL of Merlin's top dApps has exceeded the 1 billion US dollar mark, surpassing Blast and Base.

Compared to the rapid loss of funds in most Ethereum L2s after the release of pledges, Merlin Chain's strong performance in the ecosystem has consolidated the confidence in the Bitcoin narrative in the current cycle, and has also triggered thinking: For public chains, TVL is just a number, and institutions are just endorsements. When the tide recedes, the application ecosystem that is native, innovative, and adapted to the development of public chains is the foundation.

It is reported that Merlin Chain will launch an ecological incentive plan next to attract more developers to join the construction, drive growth with innovation, and steadily usher in the next milestone.

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