Merlin Chain is a Layer 2 solution designed to elevate Bitcoin's capabilities while maintaining its secure and decentralized structure. By integrating with Bitcoin, Merlin Chain expands the utility of Bitcoin by improving scalability, reducing transaction fees, and speeding up transaction processing.

Integration with Bitcoin

As a sidechain of Bitcoin, Merlin Chain operates off-chain to process transactions and securely anchor the results back to the Bitcoin main chain. This design allows Merlin to enhance the scalability of Bitcoin by processing transactions in a more efficient and cost-effective manner.

One important feature of Merlin's integration with Bitcoin is its use of Zero-Knowledge Rollup (ZK-Rollup) technology, which aggregates and compresses multiple off-chain transactions into a single cryptographic proof, and submits it to the Bitcoin blockchain. This reduces the amount of data stored on the Bitcoin network, reduces transaction costs, increases throughput, and does not compromise security.

Merlin Chain's integration also supports wrapping Bitcoin-related assets from Bitcoin Layer 1 and bridging them to Merlin's Layer 2, allowing these assets to be used in Merlin's decentralized finance (DeFi) applications. This feature expands the application scenarios of Bitcoin, allowing it to participate in DeFi ecosystems that traditionally rely on Ethereum and other blockchain networks.

EVM Compatibility

Merlin Chain's EVM compatibility enables developers to deploy and run Ethereum-based decentralized applications (dApps) on their networks. EVM compatibility means that smart contracts written for Ethereum can be easily migrated to Merlin Chain without major modifications. This interoperability opens up the possibility for cross-chain applications, where projects can take advantage of both Bitcoin's security and Ethereum's smart contract capabilities.

By supporting EVM, Merlin Chain connects the Bitcoin and Ethereum ecosystems, enabling users and developers to enjoy the advantages of both networks. This includes the ability to interact with decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and other blockchain services that were previously only accessible on Ethereum.

Cross-chain bridging and cross-chain functionality

Merlin Chain provides a bridging mechanism that allows assets to transfer between Bitcoin's Layer 1 and Merlin's Layer 2. This bridging mechanism enables Bitcoin users to transfer assets to Merlin Chain, thus enjoying faster transaction speeds and lower fees. Once assets are on Merlin Chain, users can use them for various applications, including staking, providing liquidity, and other DeFi activities.

In addition, the bridging mechanism supports cross-chain functionality, allowing assets and data to flow between Bitcoin and other blockchain networks. This functionality is crucial for achieving interoperability between different blockchains and is a necessary condition for connecting the development of multi-chain ecosystems.

Security is the core concern of any blockchain network, and Merlin Chain addresses this issue by inheriting the security features of Bitcoin. The transactions processed on Merlin are anchored to the Bitcoin blockchain, ensuring that they benefit from Bitcoin's security measures.

Merlin Chain also plans to gradually decentralize. Currently, the network relies on sorting nodes to manage data transmission, but its goal is to transition to a more decentralized model, involving more participants in the governance and operation of the network. This gradual move towards decentralization aims to enhance the network's resilience and security.

The integration of Merlin Chain with Bitcoin and its EVM compatibility brings new use cases:

1. DeFi ParticipationBy wrapping Bitcoin assets and transferring them to Layer 2, users can participate in DeFi activities that were previously only available on other blockchains (such as Ethereum), such as lending, borrowing, and yield farming.
2. Cross-chain Application: Developers can create dApps that interact with both Bitcoin and Ethereum, leveraging the strengths of both networks to develop innovative cross-chain applications.
3. Reduce transaction costsBy using ZK-Rollups and off-chain processing, transaction fees are significantly reduced, making it more cost-effective for users to trade and interact with smart contracts on Merlin.
4. Increase the speed of transactionsTransactions on Merlin Chain are processed faster than Bitcoin Layer 1, making it suitable for applications that require fast transaction confirmation.

Highlights

• Merlin Chain processes transactions off-chain and anchors them on the Bitcoin blockchain to improve scalability and reduce costs.
• EVM compatibility allows Ethereum smart contracts to run on Merlin Chain, supporting cross-chain applications.
• The bridging mechanism facilitates the transfer of assets between Bitcoin Layer 1 and Merlin Layer 2, expanding the use of Bitcoin in DeFi.
• Merlin Chain inherits the security features of Bitcoin and enhances privacy protection through zero-knowledge proof.
• Network support includes new use cases such as DeFi participation, cross-chain applications, reduced transaction costs, and accelerated transaction processing.