A Deep Dive into Merlin Chain’s Rapid Rise

Original title: How Merlin Chain Unites Diverse Forces？The Growth Code Unlocked

On March 10, Merlin Chain founder Jeff posted on Twitter “Many outsiders think that Merlin’s strength is the market and its weakness is product technology. This is the biggest misunderstanding about Merlin.”, and said: Merlin’s marketing capabilities are not as exaggerated as the rumors from outside, it is more from the spontaneous power of the community. The so-called “mysterious monster from the east” is actually driven by the trust and love of the community.

BTC L2 is a hot topic in the blockchain space, with a variety of projects vying for dominance. Among these projects, Merlin Chain has emerged as a strong contender, often being compared to ETH L2 solutions as a representative of the Western world. — In just 30 days since its mainnet launch, it has reached a TVL of $3.6 billion, an astonishing feat. This has led to many people wondering how this mysterious “Eastern monster” has been able to unite so many people in such a short period of time. Does the growth code really exist?

BTC/Ordinals: Long-termism achieves ecological prosperity

As a native BTC Layer 2, Merlin Chain has 91% of its USD 3.6 billion TVL from native Bitcoin assets, including 58% BTC and 33% Ordinals assets, surpassing Solana and Blast. This milestone is not just due to this short period of one month, but to the team’s long-term deep work in the Bitcoin ecosystem, from Recursiverse to Bitmap Explorer to BRC420, and finally to Merlin Chain.

The rise of Merlin Chain clearly shows how it united the power of the Bitcoin community in the beginning. The following is excerpted from ABCED Co-founder @BMANLead’s tweet “MerlinLayer2: The mysterious power from the East》

• June 17, 2023: RSCV published its first tweet and launched Recursive, allowing SVG splicing creation; can recursively reference other 2D inscriptions to generate new works.

• July 17, 2023: Released the BRC420 protocol, treating inscriptions as modules for building Ordinals’ stacks.

• July 31, 2023: Released Bitmap Explorer, for social, gaming and trading activities.

• September 19, 2023: Launched the BRC-420 marketplace and deployed the first asset BRC-420, the Blue Box.

• November 15, 2023: Bitmap coin swap program announced, with 1 $Bitmap exchangeable for 1,000 $WMAP, doubling Bitmap’s price; meanwhile, the Blue Box rose to $1,000.

• December 26, 2023: Rebranded as @BitmapTech; OKX Wallet announced support for BRC-420.

• January 19, 2024: Officially announced Bitcoin Layer 2 - Merlin Chain

• January 26, 2024: Launched the Merlin Chain testnet bridge.

• February 3, 2024: The Blue Box reached $40,000, becoming the third-largest 10k series NFT on the market, only after BAYC and Punks.

• February 4, 2024: ABCDE announced lead investment in BitmapTech.

• February 5, 2024: Merlin Chain completed IDO on Particle Network and issued 1% governance token $MERL.

• February 8, 2024: Merlin’s Seal staking officially went live for a fair issuance of 20% of $MERL.

• February 9, 2024: OKX Venture announced investment in Bitmap Tech.

• February 10, 2024: The first Merlin Chain Launchpad event ended with over 1 million addresses participating.

• February 23, 2024: Merlin Chain’s TVL exceeded $2 billion, surpassing Solana and Blast, ranking fifth among all chains.

In an interview, Merlin Chain founder Jeff revealed that the team initially did not set out to build a Layer 2 solution. It was through continuous product development and interaction with developers and users in the community that they realized the limitations of L1 and the need for a more flexible platform for idea implementation. The Bitmap Tech team, the creators of Merlin Chain, possesses a strong foundation in Bitcoin Layer 2. They have developed BRC-420, which defines the metaverse and copyright standards for Bitcoin assets. Prior to the launch of Merlin Chain, they had already issued 600+ NFT assets and attracted 1000+ Bitcoin ecosystem developers. Bitmap.Tech is home to over 90% of the traffic to Bitmap, Bitcoin’s first layer of native assets, and with 33,500+ unique addresses, it is the largest community of Ordinals assets.

Merlin Chain’s birth was both serendipitous and inevitable. It was a natural outcome of the team’s long-term vision for a thriving Bitcoin ecosystem.

BRC-420: Assets first, then narrative. Growing the Community from Bottom-Up

Merlin Chain’s another growth strategy is “a bottom-up issuance method, community-driven assets, from assets to a new narrative of the project”, that is, fair distribution of assets, discovered by the community, building consensus around assets, and then empowering assets through product and ecosystem construction. It’s undeniable that the Bitcoin community’s recognition of Merlin Chain from the start all came from a few leading assets of BRC-420 - the growth miracle of the Blue Box goes without saying, and the subsequent Music Box, Blue Crystal, Dragon Ball, after adopting a bottom-up fair launch, all have very bright market performances, so there is firm confidence in the community behind them, and the resulting product ecology.

A successful asset can evolve into a symbol, and symbols have tremendous cohesion. Perhaps the core of community unity is the symbol itself, rather than a certain technology or product mechanism - Bitcoin did not have any substantive “empowerment” at its birth, but is still regarded as digital gold, because it has built a borderless global social system and has become a symbol against centralization.

Unify Public Chains: From Zero-Sum Game to Win-Win Cooperation

Merlin Chain does not resist forming alliances with powerful teammates in the Ethereum system, which also reflects some Eastern wisdom.

On March 7th, Ethereum Layer2 project Manta launched the “Blast Off to Manta“ campaign, encouraging users to transfer ETH and USDC from Blast to Manta Pacific and offering $MANTA token rewards. As soon as the event was announced, a large amount of capital was transferred from Blast to Manta for a straightforward reason: Blast’s mechanism of locking liquidity for a full 14 days in a bull market is unreasonable, while Manta allows instant withdrawals and provides a lot of token rewards.

This kind of “vampire attack” is a typical crypto phenomenon, which involves attracting users from top competitive platforms by offering incentives, a common method of liquidity competition on Ethereum.

Looking back at crypto history, notable examples of “vampire attacks” include: In 2020, SushiSwap launched a DEX similar to Uniswap and rewarded users who moved their funds from Uniswap to SushiSwap with $SUCHI tokens, causing a sharp drop in Uniswap’s liquidity; In 2022, NFT trading platform LooksRare airdropped $LOOKS tokens to OpenSea users and offered better annualized APR; A month after LooksRare’s attack, another latecomer X2Y2 also launched a vampire attack on OpenSea. Despite some twists and turns, X2Y2’s user base still grew eightfold within seven days.

However, Merlin took a different path of unity. Less than a week after Manta launched an attack on Blast, on March 12, Merlin’s Seal announced the start of re-staking on Manta chain. Users can re-stake their $STONE, initially staked on Manta, on Merlin Chain to earn Merlin points for mining.

Why can Merlin Chain unite with Manta? In addition to the resources of the team itself, this wave of cooperation is beneficial for both parties. (The following analysis is taken from Twitter user @qlonlinde)

For Merlin, the locked funds will dramatically increase (as previously a large amount of ETH was locked in Manta), which is beneficial for valuation.

For Manta, the portion of TVL participating in Merlin’s lock-up remains on its own chain, avoiding the risk of a sharp decrease in TVL due to the unlocking of Stone in March, which is beneficial for stabilizing the token price.

Meanwhile, cross-chain bridges providing intermediate services, such as StakeStone and Meson, will also usher in a large number of users.

Users who stake $STONE will also receive high-quality tokens from Merlin while also earning StakeStone points.

Therefore, even though Merlin Chain also absorbed funds from the Manta ecosystem, they simultaneously achieved a win-win situation. Everyone is growing the market together, with more friends and fewer enemies. This is the game of the master.

Gathering Leaders in Niche Fields: Rapidly Building an Application Ecosystem

Bitcoin’s advantages lie in capital and community, but Ethereum obviously has a larger and more mature team, users and ecosystem at the application layer. As an emerging public chain, it is particularly important to quickly establish an application ecosystem. While Merlin Chain is incubating native Bitcoin projects, it has also quickly united leading teams with extensive experience in EVMs, covering gaming, DeFi, infrastructure, marketplaces, social networking, and other traffic areas that public chains must compete for. Projects include:

• Multi-chain interoperability protocol LayerZero, supports over 50 public chains, and has received financing from top institutions like a16z, Animoca Brands, and Sequoia Capital.
• Decentralized oracle Pyth, provides real-time data from primary data sources to over 50 chains, offers accurate, transparent, and reliable price information to more than 300 DeFi protocols, with over $60 billion in monthly trading volume and nearly $5 billion in TVL.
• Digital asset custody service provider Cobo, the founder is well-known in the circle. Cobo provides Merlin Chain with an MPC wallet solution - Cobo MPC Co-custody, ensuring the security of all funds crossed/locked on Merlin Chain.
• Chain game leader MOBOX, an old OG team, one of the earliest projects invested in by Binance, and launched through Binance Launchpool. It is still one of the games with the largest trading volume. MOBOX is about to launch its first co-creation, co-governance 3D open-world game Dragonverse Neo on Merlin Chain, and build a game L3 based on BTC L2.
• Excellent DAAS project iZUMi, which has been deployed on multiple ETH L2s to achieve top trading volume results, currently has close to $9M in daily on-chain trading volume. iZUMi crafted a dedicated trading market MerlinSwap for Merlin Chain.

The birth of BTC Layer2 is to solve the problem of Bitcoin network performance limitations. However, it has to face the fact that Bitcoin’s application ecosystem is temporarily lacking. Rome wasn’t built in a day. Merlin Chain unites Ethereum’s leading projects, aiming to quickly establish high-quality application ecosystems and highly active users in the short term. Ethereum projects can also gain new growth and liquidity in the Bitcoin ecosystem, and have unanimously chosen to start construction with Merlin Chain, achieving another win-win.

Stimulating Native Innovation: Leading the Integration and Expansion of the Bitcoin Ecosystem

Even more exciting is that a large number of native projects are emerging from Merlin Chain, with countless projects carrying the name ‘Merlin’. These projects revolve around native Bitcoin users and assets, aiming to solve native Bitcoin issues, and always adhere to principles such as fair launching and community priority in their product and mechanism designs. They are generally categorized as follows:

• Infrastructure projects around Merlin Chain itself: Such as native inscription data platform GeniiData that provides a dedicated viewing page for Merlin, and the inscription tool UniCross invested by Merlin Chain.
• Native projects closely linked to Merlin: Such as RWA inscription Mineral that uses BTC L2 DEFI design, BTC native over-collateralized stablecoin BitSmiley, and AMM derivative trading protocol Surf Protocol focused on BTC L2. Among them, there are star projects that have received top financing from OKX Venture, ABCDE, etc.
• Community coins launched from Merlin: Such as the first fully fair launched BRC-20 token $VOYA on Merlin Chain, which broke through 42 million USD trading volume in seven days and surpassed the number of wallet holders of NVDA, SORA, and JUP on Solana; and Meme Token $HUHU (in the image of a wizard cat), which gathered the first batch of active fans during the Merlin test network period.
• Innovative projects: Such as SocialFi project Influpia that combines Fair Launch and friend trading, and native Bitcoin game Bitmap War based on Bitmap.

The original intention of Merlin Chain is to serve native Bitcoin users well and strongly support exploration of native innovations with native users and native assets. According to founder Jeff in a Twitter Space, Merlin Chain is about to launch a developer incentive program to strongly support developers to build on Bitcoin with generous rewards. They hope to see the emergence of native dApps on-chain that perform better and are more innovative, leading the integration and expansion of the Bitcoin ecosystem. Let’s wait and see.

Financing Lineup: The Strongest Assembly of Eastern Power

Merlin Chain’s founder, Jeff, is a serial entrepreneur who has previously received financing from top-tier institutions such as Sequoia Capital, IDG Capital, BAI Capital (Bertelsmann), Wuyuan Capital, and Oasis Capital in the Web2 era. Therefore, Merlin Chain unsurprisingly assembled over 20 investment institutions: OKX Venture, ABCED, Forsight Ventures, and ArkStream Capital led the investment, setting the imagination for top-tier exchanges. Including viaBTC and other leading mining pools, there is robust financial support behind, providing security and technical guarantees. Merlin Chain’s financing lineup can be seen as the strongest assembly of Chinese entrepreneurs and Chinese investors under the BTC ecosystem trend. It’s no wonder Merlin Chain is often referred to as the “mysterious power from the east” when compared to Blast.

Security Council: Protecting the Merlin Ecosystem

How does Merlin Chain ensure the security of funds given the current astonishing staked data of 3.6 billion USD? The staking and re-staking race is thriving, and the safety of funds is a matter of life and death for public chains. On March 6, Merlin Chain, in conjunction with several security companies, established the Merlin Security Council, including the renowned Slowmist, whose founder’s 2022 publication, the “Blockchain Dark Forest Self-Rescue Handbook,” is widely circulated within the industry, and several other well-known security teams such as BlockSec, Salus, Secure3, ScaleBit, Revoke.Cash. The council funds research, education, and technological development and encourages more white hats and dApps to join this decentralized organization to safeguard the future development and construction of Merlin.

Conclusion

Finally returning to the initial question, does the rapid rise of Merlin have a so-called growth code? In fact, the founder Jeff has already made the answer public in the public Space:

_”_From a large market perspective, Merlin has just been released a month ago. Just a few days after it was launched, it suddenly swept the entire market and everyone was talking about it. Maybe it is this suddenness that makes everyone feel unreasonable and needs to explain this rise. There must be a reason, this ecological fire must have something to say. If I don’t know why it suddenly became popular, then there must be this mysterious power behind it.

But what I want to say is that our team has actually existed in the inscription ecology since the earliest and coldest time. In May and June of last year, there were probably no more than 10 regular developer teams in the world in this ecosystem, Ordinals’ assets were almost zero, and the entire Bitcoin ecosystem and Ordinals were ridiculed by the outside world… Under those circumstances, We found that Ordinals has 5 to 10 Twitter Spaces every night, including English and Chinese, where a group of developers gathered and supported each other, and brainstormed new things. In fact, the pressure to learn at that time was much greater than it is now. New protocols, new standards, and new innovations appeared every day. I could feel the vitality of the entire ecosystem. Everyone’s belief and investment in this matter was very high. This made me feel the purity of an industry in its early days, as well as the dedication and belief of the users and developers surrounding this ecosystem. So we kept building during the coldest time, making no money or charging no money, and made seven or eight products, and now we are here.

For people who don’t pay that much attention to the Bitcoin ecosystem, they may think it’s a sudden appearance and don’t understand it. For us, although it did exceed our expectations, our long-term development on Bitcoin L1 has accumulated a lot of community ecology and user traffic for us. Before the birth of Merlin, we already had Bitmap and BRC-420, the second and third largest communities in the Bitcoin ecosystem. The core development was also done inhouse. We understand what our users are trading and what assets they have, and their commitment to the community. On this basis, Merlin’s results were actually predictable. Of course, for the outside world, this may be a quick thing. But for us, this matter is serendipitous but inevitable.”

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