BRC-420 protocol ecological project has risen against the overall market correction in the recent period.

Among them, the price of Blue Box (BRC420) once soared from 0.15U to 26,000U, with a market value of 10,000 BTC, following closely behind BAYC and CryptoPunks. As of now, the price of Blue Box in the Ordinals range of the 10k collection still ranks first.

(Image source: Twitter @zad1130)

Behind Blue Box is the Bitmap Tech team, which, in addition to the BRC-420 protocol, has also launched Bitmap.Game (Bitmap Metaverse) and Recursiverse (a product matrix based on the recursive protocol). Bitmap's market value has recently surged from $3 million to a peak of $290 million, with over 30,000 holding addresses. Like Blue Box, it has become one of the highly anticipated projects in the Ordinals ecosystem.

The Bitmap Tech team launched the testnet of the Bitcoin Layer 2 solution, Merlin Chain, this week and revealed in an interview that its mainnet will also go live in February 2024. This article aims to restore its vision and solution path by combing through the public information about Merlin Chain.

Aiming to be the leader of the Bitcoin Layer 2 network

The transaction volume of the Bitcoin Layer 1 network has grown rapidly under the rise of the Ordinals ecosystem, but it was not designed to fully consider data-intensive transactions, leading to unbearable congestion in the Bitcoin network. To address this issue, numerous Bitcoin scaling solutions have emerged recently, from side chains that require self-assured security to DA Rollups based on the Bitcoin Layer 1 network, sparking discussions.

(Bitcoin network daily transaction fees, image source token terminal)

Among these many solutions, the solution of EVM side chains combined with cross-chain bridges has become an immediately implementable solution and has become a standard for the Bitcoin Layer 2 network in the short term. The Bitmap Tech team, which has been deeply involved in the Bitcoin ecosystem for many years, quickly engaged in the development of the Layer 2 network and launched Merlin Chain.

It is worth noting that improving the congestion of the Layer 1 network and reducing transaction fees is just one of the problems that Merlin Chain aims to solve. The team is focusing on the more profound and complex problem of "very few new users in the Bitcoin network."

(Bitcoin network daily active addresses, image source token terminal)

The goal of Merlin Chain is not only to improve the transaction environment of the Bitcoin Layer 1, but also to introduce more native applications in the Layer 2. By empowering the assets, protocols, and user ecosystems of the Layer 1 in the Layer 2, such as building a metaverse that users can easily enter based on Bitmap, and building DeFi protocols based on BRC-420 to maximize the release of its graphic coin duality, to amplify the overall asset potential of the Bitcoin ecosystem.

Integration of ZK-Rollup technology and asset security guarantee

In terms of technical implementation, Merlin Chain adopts ZK-Rollup technology to compress a large amount of transaction proofs into a simple checksum, thereby reducing the cost of on-chain transactions. The sequencer node in the Layer 2 is responsible for collecting and batch processing transactions, generating compressed transaction data, ZK state roots, and proof through zkEVM.

The compressed transaction data and ZK Proof will be uploaded to the taproot of the Bitcoin Layer 1 through a decentralized Oracle network, facing the entire network publicly to ensure transparency and fairness.

Decentralized Oracle network nodes will be required to stake BTC to ensure that they do not act maliciously. Users can challenge the ZK-Rollup based on the compressed data, ZK state roots, and ZK Proof. A successful challenge will result in a rollback to the previous verified state and confiscation of the staked assets of the Oracle node, ensuring the security and credibility of the system.

Through the integration of these technical modules, Merlin Chain is expected to build an efficient, secure, native Bitcoin Layer 2 solution.

Leading the integration and expansion of the native Bitcoin ecosystem

In addition to its strong technical capabilities, what sets Merlin Chain apart from other Layer 2 projects is its strong emphasis on being "Bitcoin-native" and its hope to ultimately contribute to the development of Bitcoin. Therefore, as the first step in serving the Bitcoin ecosystem, the team has successfully integrated Bitcoin wallets on the EVM chain through the account abstraction protocol.

On Merlin Chain, users of the native Bitcoin ecosystem can continue to use their Bitcoin wallets, freely switch between the Layer 1 and Layer 2 networks, and experience seamless exchange between Bitcoin and other assets. At the same time, users of the Ethereum ecosystem who have never dealt with Bitcoin before can also interact using their familiar EVM wallets, such as MetaMask, to make transactions, pay stablecoins, or Ethereum, BNB, MATIC, and other EVM system tokens. In this way, Merlin Chain has successfully lowered the interaction threshold between the two ecosystems of Bitcoin and Ethereum, and is expected to bring new user growth and activity to the Bitcoin ecosystem.

In addition, Merlin Chain also supports BRC-20, BRC-420, Bitmap, Atomicals, and other inscription protocols. Users can transfer these native assets to Merlin Chain through cross-chain bridges, and can even mint Layer 1 inscriptions on Merlin Chain at a lower cost and at least three times the speed.

On Merlin Chain, the inscribed assets obtained on the Layer 1 network will be automatically added to the whitelist to ensure the security of user transactions on Merlin Chain. This series of designs makes Merlin Chain a diversified, efficient ecosystem that has attracted partners from various fields.

Currently, Merlin Chain has announced ecosystem partners covering DEX, DeFi, gaming, social, and other fields, and is expected to further expand its ecosystem scale after the mainnet goes live.

Adhering to the native Bitcoin faith and practicing decentralized governance

In terms of token economics, Merlin Chain adheres to the belief in "Bitcoin-native" and rejects the idea of using Ethereum assets as governance tokens for the Bitcoin Layer 2 network, choosing to use the native BRC-20 protocol instead. In adherence to the decentralized governance concept, the governance tokens of Merlin Chain will be mostly released to users and the community based on the staking and activity of users on the chain.

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