With the approval of the BTC ETF, the Bitcoin ecosystem is entering a golden age, and many people believe that the main outbreak of this bull market will occur in the Bitcoin field. We are honored to invite Jeff, the founder of Merlin Chain, a pioneer deeply involved in the Bitcoin ecosystem. Merlin Chain is a BTC Layer2 that focuses on serving Bitcoin native users, assets, and protocols, and achieves the security sharing of Bitcoin Layer1 through ZK technology. It is an undeniable force in the current Bitcoin ecosystem.

The Design Concept of Bitmap and BRC-420

BlockBeats: The market response to Bitmap.Game and BRC-420 is very good. Can you share the original intention of creating these two projects?

Jeff: Bitmap is a completely decentralized and trustless asset we saw in the market. Each inscription on it represents specific data of a specific block, such as all transaction information, fees, and mined bitcoins.

The asset itself is completely decentralized, and anyone can inscribe it, so the community is very large. However, when it was just inscribed, its market value was only 2 million US dollars. We hope to develop some applications for this large community and provide some practicality, so we launched Bitmap.Game, a metaverse on Bitcoin.

The yellow dots on the image are the currently online users, and when zoomed in, you can see each person's plot:

The images and content on the plots, or all visible content in our product, are all on-chain data. Everyone has different wallet assets and can choose to use these assets as the cover of the plot. Upon entering a specific plot, you can see all avatars and the gameplay and scenes of the room, all of which are also on-chain assets.

Our original intention in launching Bitmap.Game was to build a client-agnostic, server-independent, decentralized, and permissionless product. Because all the data comes from the chain, not from us, even if we no longer operate, others can choose to build their own client to continue development, and anyone can compete to develop similar products. We believe that such products are the future direction, which may be unique, but it is indeed our original intention.

As for BRC-420, we call it an asset protocol for data modularization and tokenization. In other words, we can modularize any data and tokenize it to make it an asset. For example, there is a DLC called Bitmap.town, which contains over 600 metaverse game assets, such as animations, scripts, avatars, music, etc. They are packaged into a DLC and then tokenized. Once the project is released, all content will be fully on-chain, and users can access it, build their own content based on it, and hold these tokens without relying on the team that developed this DLC.

So far, the trading volume of BRC-420 assets is large, and the increase, number of holders, and market value are all good. Although it was initially referred to as a metaverse protocol, BRC-420 actually has no necessary connection with the metaverse. We hope that there will be more innovative gameplay based on decentralized product structures and fully on-chain modular combinable asset protocols in the future.

BlockBeats: This seems to be like turning inscriptions into a game card and turning Bitcoin into a game console, allowing players to copy games into it. How do you think these functional features will impact the development of the entire Bitcoin ecosystem?

Jeff: Among all the teams in the Bitcoin ecosystem, we are considered the most unique because we do things that have not appeared in other ecosystems. Initially, we did a lot of things based on recursion, such as recursive graffiti, and a recursive on-chain forum. Later, we created Bitmap, a completely decentralized data package, and then launched BRC-420.

First, I believe that any new ecosystem needs its own narrative. Doing the same thing as Ethereum in the Bitcoin ecosystem, or vice versa, seems to lack innovation. Just like after the popularity of the blue box, there appeared a 420 protocol on every chain, with boxes of various colors. We must do something that has not appeared before, create a new narrative, in order to drive the development of the Bitcoin ecosystem. For example, if a lot of content on Ethereum is not on-chain, then we need to combine on-chain content.

The second is the new product model under the new narrative, which can be seen in many products based on BRC-420. For example, Mineral has created a gameplay that combines DeFi and computing power; some on-chain games based on Bitmap, such as Bitmap Valley and Bitmap War, all use the BRC-420 protocol to issue assets, and operate products based on these assets on the second layer network: first issue BRC-420 assets, then convert them into graphic coins, or airdrop tokens, and then build products based on these assets on the second layer network. I think the innovation of the entire product model will continue to emerge with the overall trend.

The last one is composability. I believe this is the greatest productivity innovation of blockchain, but it is rarely mentioned in ecosystems like Ethereum. I believe you are also familiar with the term "DeFi Lego." The essence of DeFi is the composability of different Legos. From Uniswap to liquidity mining, to Compound, and then to Curve, etc., smart contracts have led to the innovation explosion of the entire industry, all stemming from composability. Bitcoin can solve composability on content. For example, if you create a game with 20 modules, I can quickly create a new game based on 15 of these modules without having to reinvent the wheel. I think we have grasped the most unique innovation in the Bitcoin ecosystem, rather than replaying the gameplay of Ethereum.

Jeff's Entrepreneurial Journey in the Bitcoin Ecosystem

BlockBeats: From your speech, we can feel that you have a very deep understanding of Bitcoin and the entire crypto industry. Did you consider starting a business in other ecosystems before the outbreak of this round of the Bitcoin ecosystem?

Jeff: Starting Bitmap Tech this time is actually my first time starting a business in Web3. I have always been in Web2 entrepreneurship before. I have always believed in the spirit of blockchain. The reason I did not choose to start a business in the blockchain field before is that I did not find a real entry point that could improve productivity.

As a user of the Internet generation, we deeply feel the improvement in productivity brought about by the Internet. We can participate in meetings through video, access more information on the network, and many people can see the world that only a few people could see before, and so on. Therefore, I believe that productivity innovation is a core key point.

Whether it was in the ICO in 2017 or the DeFi in 2020, I did not find the entry point I liked, so I have always focused on Web2 entrepreneurship. In fact, my previous company was also involved in the metaverse field, with about 40 to 45 million users globally.

Starting a business in Bitcoin this time is actually quite coincidental. When we decided to take another look at Web3, we happened to encounter the rise of the Ordinals ecosystem, and I feel very lucky.

Next, the market trend is gradually returning to the early encryption culture of Bitcoin, which reignites my original intention for Web3 entrepreneurship. In my opinion, the Ethereum ecosystem is too institutionalized, with too many established rules, clearly defined gameplay, and a high degree of centralization. For example, it requires following Vitalik Buterin's entrepreneurship, following the Ethereum Foundation's entrepreneurship, and then seeking VC, exchanges, and so on. This kind of gameplay makes me feel that it has lost the original intention of encryption.

The completely on-chain concept advocated by Ordinals aligns with my belief in permissionless composability, and my own beliefs, so I chose to start a business in the Bitcoin ecosystem in this wave.

BlockBeats: It is evident that you are a firm believer in Bitcoin. Can you share how you first got in touch with Bitcoin? Why do you now firmly believe in the future of Bitcoin?

Jeff: I actually got in touch with Bitcoin very early. In 2012, I received an investment from a VC and founded my first company in China, and this investment institution also happened to invest in Coinbase and Ripple. At that time, I was also an early scholar in computer science, but later during my high school and undergraduate studies in the United States, I shifted to political science and sociology. The combination of these backgrounds filled me with faith when I first encountered Bitcoin.

At that time, many programmers did not trust Bitcoin and thought the technology was outdated, while many liberal arts students found it too esoteric and did not have much of a feeling for it. However, after reading the Bitcoin whitepaper for the first time, I wholeheartedly immersed myself in it. Therefore, I and the first group of people in China who got in touch with Bitcoin became good friends. We discussed together how to buy Bitcoin and later traded together. I believe in Bitcoin without any specific reason; it is a matter of faith.

I think Bitcoin and Ordinals are very similar, both being anti-fragile and having no weaknesses. Even if the price drops very low, even if everyone dislikes it, it will still exist forever, cannot be eliminated, and cannot be wiped out by a single document. This was what I liked the most at that time. Because the world is fragile, with various problems in different countries and regions, it needs something anti-fragile. So, for over a decade, I have had an immense faith in Bitcoin and started to believe in the Ordinals ecosystem last year.

BlockBeats: It seems like you are a very punk person. Has this belief in the Bitcoin ecosystem influenced your project positioning and development direction?

Jeff: First, we hope to find the most unique innovation in the Bitcoin ecosystem and never retrace the old path of Ethereum. As entrepreneurs, we are eager to challenge uncertainty, as this is what sparks innovation. Following the paths already taken by others lacks freshness.

Second, our belief in the ecosystem is also a belief in people. When we started building Ordinals products, it was around May or June last year, and at that time, almost all of Ordinals' assets were close to zero. The entire Bitcoin ecosystem and Ordinals were ridiculed and looked down upon by the outside world. When I was outside, almost no one around me knew that I was working on Ordinals because once it was mentioned, many people would think it was a scam or a game for kids.

However, in that situation, we found that there were 5 to 10 Twitter Spaces every night, including English and Chinese, where a group of developers gathered together to seek warmth and envision new things. In fact, the pressure of learning at that time was much greater than it is now, with new protocols, standards, and innovations appearing every day. I could feel the vitality of the entire ecosystem, and everyone's faith and dedication to this matter were very high. This made me feel the purity of an early industry and the dedication and faith of the users and developers around this ecosystem.

Therefore, whether it is the Layer2 we are currently working on or new products in the future, they will revolve around these users and assets. We sincerely hope to build and participate in this ecosystem for the long term, truly becoming a part of these local communities, including local assets. Compared to many other projects that quickly introduce Ethereum assets and mechanisms, we are more willing to build and innovate around the existing users and assets.

Current Development Status of BTC L2 and Innovative Approach of Merlin Chain

BlockBeats: Can you share why you decided to establish Merlin Chain?

Jeff: Three to four months ago, I often discussed with others that it is difficult to play on Bitcoin Layer1. You will find that all users are constantly chasing new projects. As soon as one asset is finished, no longer rising, everyone runs to the next asset to chase new gains. They are constantly busy, but do not know what they are busy with.

Most of the assets that rise quickly and have high market values are mostly from three months ago, and it is now very difficult to produce new assets. This is because the narrative is not fresh, the application scenarios are too limited, and the financial liquidity and leverage are too weak. Therefore, to make this ecosystem more prosperous, it is currently a pressing need to implement these functions in a virtual machine environment.

Therefore, Bitcoin Layer2 is an actual user demand, not a fantasized demand. In addition to this, there is also a demand from capital because it is not possible to invest on Layer1, and it is all Fair Launch. Therefore, investors will choose to invest in Layer2.

The reason we want to do Layer2 is actually for our community, users, and the things we want to do ourselves. For example, in the past six months, there have always been people asking us why we don't use Bitmap to create games, or why we don't do Play-to-Earn (P2E). This is because doing these things requires a virtual machine, which is not possible on Layer1. All users and the ecosystem are calling for this demand, so three months ago, we decided to establish a true Bitcoin Native scaling solution.

BlockBeats: What are the differences/advantages of Merlin Chain compared to other L2 solutions?

Jeff: The biggest feature is that we want to first serve the native users of Bitcoin and explore native innovations with native users and native assets. We believe that if we cannot serve the basic user base well and instead start by serving Ethereum users, most of whom are Ethereum users, and the assets are ETH and USDT, then this chain is actually difficult to call a Bitcoin Layer2, even though such chains are still being referred to as Bitcoin Layer2.

Based on this, three months ago, we collaborated with Particle to create a Bitcoin wallet solution. Regardless of whether you use Unisat or OKX, any Bitcoin wallet can seamlessly switch between Layer1 and Layer2. This added a lot of time and cost, but we felt it was something that had to be done and that we must serve Bitcoin users well.

The second feature is serving Bitcoin assets, such as ORDI, SATS, RATS, and so on. Currently, most so-called Bitcoin Layer2 solutions have Ethereum assets on them, and some even have BNB Chain assets. We believe that Bitcoin assets and the community must be the first to use them before we can further explore what kind of innovation ARC-20 and BRC-420 can bring, rather than innovating with Ethereum and USDT, which is not true innovation.

The third thing is a natural progression, which is embracing native Bitcoin innovation. Only by putting real Bitcoin users, protocols, builders, project parties, and native assets into a virtual machine can we expect innovation to emerge. If everything is Ethereum-based, it is impossible for Bitcoin innovation to occur.

Currently, the combined market value of Bitcoin-related assets is only about 4 billion US dollars, which is still a long way compared to the market value of Bitcoin. We want to embrace these assets and users, and then explore model innovation together with them.

The first Launchpad we are going to launch is the People's Launchpad developed by Particle, which will continue to use the BRC-20 protocol and bring some innovation in the issuance of native Bitcoin assets.

In terms of technology, we believe that being EVM compatible is not an innovation, as everyone is EVM compatible. Our innovation lies in building our own cross-chain bridge, which allows us to cross-chain any assets we want, such as Bitmap, BRC-420, ARC-420, which currently no other chain supports besides us. Another innovation is that we have built ZK Rollup to further compress the volume of ZK proofs and construct a DA Layer that inherits the security of Bitcoin. All of these will be showcased in our GitBook. However, many teams are also exploring this direction with us, and it's difficult to say that the technology innovation is solely ours.

In terms of the ecosystem, we have People's Launchpad, Mineral, Bitmap War, and games from MOBOX. We hope to serve more of these existing Bitcoin ecosystem products because these communities are very active, easy to launch, and can generate traffic and income easily.

Jeff on the Future Outlook of Merlin Chain and the Bitcoin Ecosystem

BlockBeats: How will the launch method of Merlin Chain differ from other projects?

Jeff: Assets on Bitcoin Layer1 have a characteristic: the more holders there are, the more inscriptions there will be, the higher the cost, and the higher the return expectations, making it difficult for asset prices to rise. This creates an impossible triangle, leading to the current stagnation of Bitcoin assets.

People's Launchpad will adopt a similar issuance method to Bitcoin Layer1, but it can reduce costs, increase the number of holders, and make the entire issuance process more interesting. All tokens issued on it will use a valuation of $100,000. Many people may have high expectations for Merlin Chain, thinking that it should reach a market value of several billion or even tens of billions, but we will still allocate a certain share and conduct a fair launch based on a valuation of $100,000 on People's Launchpad.

I think this will be a community-oriented, fair, fun way to issue assets, while allowing users to obtain assets at a lower cost.

BlockBeats: Will there be any recent news from Merlin Chain? What is the future roadmap?

Jeff: In early February, we will announce a token staking reward program to allow early users to provide liquidity at zero cost while receiving token rewards. Our mainnet testnet will also go live in early February, and products such as People's Launchpad, iZUMi Finance's MerlinSwap, and Bitmap War will be launched.

In the first half of the year, we will conduct some developer ecosystem activities to attract more builders because we do not want to directly transfer Ethereum DApps here and play with the same model. Therefore, we have invested in and incubated many native projects, using Bitcoin's methods to create DApps. One of the products can receive any token on Layer2 for inscribing Layer1 assets, similar to cross-chain token forging, which is very native to Bitcoin.

We will have two developer incentive programs this year to encourage more people to build in a native Bitcoin way, achieve more users, better liquidity, and more innovative products.

BlockBeats: Many people are saying that this bull market will mainly occur in Bitcoin. What are your thoughts? Can you share your expectations for the development of the Bitcoin ecosystem?

Jeff: I agree. Ethereum assets already have many ways to generate returns, including DeFi, lending, and the yield from PoS itself, but Ethereum's market value is still less than one-third of Bitcoin's.

Bitcoin's market value accounts for over 50% of the entire cryptocurrency market, and if the function of generating returns is introduced, the financial derivative returns and liquidity that this capital volume can bring are something that other ecosystems cannot achieve no matter how innovative they are. Therefore, I think the demand for generating returns from Bitcoin assets alone is enough to trigger a bull market.

There is also a lot of room for imagination for new assets on Bitcoin. During a bull market, the total market value of ERC-20 tokens is actually similar to the market value of ETH itself, while the current market value of Bitcoin assets is still only about two-hundredths of Bitcoin's market value. The process of striving from two-hundredths to one hundred percent, which means all Bitcoin assets rising 200 times, I believe can be called a bull market. This 200-fold gap will have a significant impact on the entire crypto market, and there are currently no similar opportunities in other markets.

BlockBeats: In the development of the Bitcoin ecosystem, what role do you think Merlin Chain will play? How will it empower Bitcoin projects and assets?

Jeff: Merlin Chain will help BRC-20, BRC-420, Bitmap, and other assets to circulate better on Layer2, issue better, and obtain more leverage. We hope to accompany these native assets in exploring opportunities and new innovative methods, helping them grow from 0.5% of the market value to 100%.

Once the ecosystem has a certain level of liquidity, trading volume, users, and mature DeFi infrastructure, Bitcoin holders and even whales will have the opportunity to generate returns using Bitcoin as a single asset, thereby amplifying liquidity. By serving native assets and users, increasing trading volume, and using this to attract Bitcoin OGs to put money into yield farming, we aim to create a positive cycle, which is what Merlin Chain wants to do.

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