What is Merlin Chain?

What is Merlin Chain?

Merlin Chain is a Bitcoin-native Layer 2 solution designed to enhance the scalability and functionality of the Bitcoin network. Developed by a team with experience in both web2 and the crypto space, Merlin Chain was created to address the limitations of Bitcoin Layer 1, particularly in supporting decentralized applications (dApps) and smart contracts.

The Bitmap Tech's team launched the mainnet just five days after the testnet, reflecting a rapid development pace. Since its launch, Merlin Chain has grown to attract nearly $2.2 billion in liquidity (total value locked) by offering a more scalable and user-friendly environment for Bitcoin-related activities and assets like BRC20 and BRC420.

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How Does Merlin Chain Work?

Merlin Chain functions as an EVM-compatible sidechain to Bitcoin, enabling the use of Ethereum-like smart contracts and dApps while leveraging Bitcoin's security and liquidity. Key features include:

• Seamless Bitcoin Integration: It supports Bitcoin-native protocols like BRC20 and BRC420, opening doors for diverse applications like NFTs.
• EVM Compatibility: Supports the Ethereum Virtual Machine (EVM), facilitating easy deployment of Ethereum-based dApps on Merlin.
• Bridging Bitcoin Assets: Allows for the wrapping and bridging of Bitcoin-related assets from Bitcoin Layer 1 to Merlin’s Layer 2, integrating these assets into DeFi applications.
• Scalability and Lower Fees: Operates as a sidechain, offering lower gas fees and higher transaction throughput compared to Bitcoin Layer 1.
• ZK Proofs and Decentralization: Uses zero-knowledge rollup proofs to improve transparency and security, with ongoing efforts to further decentralize the network.

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Merlin Chain's Native Token MERL

The native token of Merlin Chain, MERL, plays a key role in governance and utility. Distributed through a fair launch, 20% of the total supply was allocated to users who staked Bitcoin during the Merlin's Seal campaign. MERL is used for governance, staking, paying transaction fees on prospective Layer 3 networks, and providing liquidity within the ecosystem. MERL holders can also delegate their tokens to consensus nodes, supporting the network's decentralization and scalability.

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Tokenomics of MERL

The total supply of MERL is 2,100,000,000 tokens, released over four years starting from the Token Generation Event (TGE). The tokenomics distribution is as follows:

• Merlin’s Seal Participants: 20% of the supply (420,000,000 MERL) was airdropped, with 50% unlocked at TGE and the rest released over five months.
• Public Sale: 1% of the supply (21,000,000 MERL) was allocated for public sale via the People’s Launchpad.
• Private Investors: 15.23% of the supply (319,830,000 MERL) was allocated across two investment rounds, with a vesting schedule after a 6-12 month cliff.
• Advisors: 3% of the supply (63,000,000 MERL) for advisors, with a 30-month vesting period.
• Team: 4.20% of the supply (88,200,000 MERL) allocated to the team, with a 24-month vesting period.
• Community: 16.57% of the supply (348,000,000 MERL) reserved for future ecosystem plans and community rewards.
• Ecosystem: 40% of the supply (840,000,000 MERL) for ecosystem grants and incentives.

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What is M-Token?

M-Token is a voucher representing staked assets on Merlin Chain from the Merlin's Seal event. When users staked assets such as BTC, ETH, USDT, USDC, various BRC-20 tokens (like ORDI, SATS), and BRC-420 tokens (like Bluebox, Dragon Bal), they received equivalent M-Tokens (e.g., M-BTC, M-ETH) on Layer 2. These tokens can be exchanged 1:1 for the corresponding Layer 1 assets. Supported wallets include UniSat, OKX, Bitget, and Bybit.

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Partnerships and Funding

Merlin Chain is actively expanding its network through strategic partnerships. A key partnership with the Tron Network enables seamless interaction between Bitcoin and Tron, broadening the use cases for both ecosystems. Additionally, Merlin Chain has partnered with OKX to integrate its Web3 wallet, making it easier for users to connect and interact with the Merlin protocol.

Earlier in 2024, Merlin secured funding from a distinguished group of 24 investors, including OKX Ventures, ABCDE, Foresight Ventures, and Arkstream Capital with the exact amount remaining undisclosed.

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What is Merlin’s Adventure?

Merlin Chain has launched "Merlin’s Adventure", an Ecosystem Grant Program offering 210 million $MERL to support builders who contribute to the development of the Merlin Chain ecosystem. The program focuses on five key areas: User Experience, BTC Native Assets, Ecosystem Engagement, Visibility, and Bitcoin Innovation. Selected projects will receive funding, technical support, and networking opportunities.

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Conclusion

Merlin Chain is establishing itself as a powerful Bitcoin Layer 2 network, combining Bitcoin’s security with the flexibility of Ethereum’s EVM. As Jeff, the founder, has emphasized, the goal is to "make Bitcoin fun again" by expanding its use cases. With ongoing developments and strong community support, Merlin Chain will continue its mission to expand Bitcoin's use cases beyond just being a store of value (and a treasury asset for institutions and countries).