Merlin Chain Unlocks DeFi Potential for Bitcoin Holders

With the introduction of yield opportunities, Merlin Chain, a layer-2 blockchain created specifically for Bitcoin, is in a position to transform the environment for BTC holders. In order to level the playing field with blockchains like Ethereum, Merlin Chain intends to give bitcoiners access to a variety of DeFi services and staking yields through the use of a proof-of-stake (PoS) consensus mechanism and a suite of various integrations.

Investors in Ethereum have long benefited from a variety of ways to generate yield, including yield farming, liquidity mining and staking rewards. On the other hand, aside from possible price growth, owning Bitcoin has not really offered many benefits.

This dynamic is what Merlin Chain aims to alter. The disparity on the market was brought to light by Jeff, the creator of Merlin Chain: despite being one of the best-performing assets over the last 10 years, holders of Bitcoin have missed out on the yield opportunities present in other ecosystems.

Merlin provides new opportunities for BTC investors to earn and interact with the DeFi ecosystem. In order to receive yields on their Bitcoin, users must first use the Merlin Bridge to bridge their Bitcoin to the Merlin Chain. In order to create M-BTC, a wrapped bitcoin asset that generates staking rewards akin to Ethereum’s stETH, this process entails locking BTC on layer 1 and receiving gas BTC. 

When users obtain M-BTC, a number of opportunities become available. Earning SolvBTC provides access to DeFi services by staking M-BTC on DeFi platforms such as Solv Protocol. It supplies liquidity through integrating Merlin with leading DeFi protocols to earn yields, utilizes BTC for lending borrowing derivatives and other DeFi operations, and establishes a link between SolvBTC assets and layer-2 Bitcoin networks such as Linea to generate extra incentives.

In just 45 days, Merlin Chain has enabled over $13 billion in Bitcoin transactions through its network, with $700 million of that cryptocurrency being distributed to layer-2 networks in exchange for extra benefits.

To improve the security of its proof-of-work mechanism, the platform has teamed up with leading cryptocurrency custodians and organizations such as Fireblocks, Cobo, Ceffu and Antalpha.  Merlin Chain is working with more than 10 significant institutions to decentralize the network validator set and increase participation.

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Arman Shirinyan