Merlin Chain Emerges as a DeFi Powerhouse, Garnering $980M in TVL

Merlin Chain, a recently launched Bitcoin Layer 2 network, has attracted almost $1 billion in total value locked (TVL) across eight dapps, with TVL surging to $980 million on April 23. Built upon Ordinals and Runes protocols, Merlin uses zk-rollups for efficient off-chain transaction settlement and supports Bitcoin tokens leveraging the BRC-20 protocol.

Merlin Chain Emerges as a Powerhouse in Bitcoin's Evolving DeFi Landscape

Merlin Chain, a groundbreaking Layer 2 network for Bitcoin, has garnered immense traction in its nascent phase, amassing a staggering $980 million in total value locked (TVL) across its supported decentralized applications (dapps). This remarkable surge, witnessed over a mere 8-week period, propels Merlin to the forefront of Bitcoin's rapidly expanding decentralized finance (DeFi) ecosystem.

Merlin's meteoric rise is attributed to its innovative approach in supporting Bitcoin tokens leveraging the Ordinals and Runes protocols. Ordinals, which gained prominence last year, revolutionized the Bitcoin ecosystem by introducing non-fungible tokens (NFTs) directly onto the blockchain. This innovation sparked a resurgence in the NFT market, with Bitcoin NFTs accounting for over 50% of total NFT trading volume in recent months.

Building on the success of Ordinals, the Runes protocol introduced a fungible token standard for Bitcoin, known as BRC-20, mirroring the widely adopted ERC-20 standard on Ethereum. Recognizing the potential of BRC-20 and similar protocols, Merlin aims to enhance the scalability and efficiency of Bitcoin-based tokens.

Through the utilization of zero-knowledge (zk) rollups, Merlin enables the off-chain settlement of transactions, mirroring the approach employed by Polygon on Ethereum. This innovative architecture optimizes network performance, reducing transaction costs and latency.

Merlin Secures Over $2 Billion for Token Launch

On April 19, Merlin launched its much-anticipated governance token, MERL, on the BRC-20 network. To facilitate a fair distribution of MERL, the protocol organized a "Merlin's Seal" event, inviting investors to stake Bitcoin and other crypto assets to earn M-points. The allocation of MERL tokens was subsequently determined based on the M-points accrued.

DefiLlama data reveals that Merlin's Seal event garnered an impressive $2 billion in staked crypto assets, with Bitcoin accounting for over 80% of the total. Other staked assets included BRC-20 tokens such as STONE, SATS, ORDI, and RATS.

A Contender in the DeFi Arena

Merlin's stellar performance has propelled it to the 10th spot among DeFi chains ranked by TVL, surpassing established players like Polygon and OP. This rapid ascent underscores Merlin's pivotal role in the burgeoning Bitcoin DeFi landscape.

As Bitcoin continues to evolve, Merlin Chain positions itself as a catalyst for innovation and growth within the ecosystem. Its unique capabilities and unwavering commitment to scalability and efficiency make it a strong contender in the rapidly expanding realm of DeFi on Bitcoin.