原文标题:写在 $MERL 发币前——MerlinChain前传
Original author: Dongle
Original source: Twitter@JiamigouCn
1. Is Merlin very popular?
After MerlinChain launched its mainnet in February, the TVL rushed to nearly $4 billion in a month, and now it remains at about $3 billion, which has completed the bottoming demand of the entire project.
Judging from the 28 BTCLayer2 counted by DWF, MerlinChain has become the absolute leading project of BTC Layer2.
Judging from the data, MerlinChain has reached the level that a public chain should have.
From the perspective of community building, the heat is also enough. Before writing this article, I had a high fever for two weeks, and in these two weeks, I read hundreds of MerlinChain-related articles and papers, and as a KOL, I intuitively felt that these papers were not like official ones, but were more spontaneously built and promoted by the community.
For example, this great god has organized all MerlinChain articles into one Notion for everyone to see:
https://merlinchin.notion.site/merlin-chain-wiki-8C634e0068879462f85bek77f19cb98eb
On Twitter, I saw a lot of influencers with less than 10,000 followers, who wrote a lot of summary tweets early in the project, and I excerpted a little bit of them:
These are just the tip of the iceberg in the two months of the MerlinChain chain, in addition to data and community heat, there are many ecosystems under construction on the MerlinChain chain, and I will not list them here. Judging from these data and popularity, MerlinChain's basic disk has been created, and it depends on the performance of the tokens on the line.
We often say that Rome was not built in a day, and MerinChain was not built at the beginning, let's take a look at how MerlinChain was launched.
2. Merlin prequel
Before the birth of Merin Chain, 600+ inscription assets and 1000+ Bitcoin ecological developers were launched; Bitmap.Tech has more than 90% of the traffic of Bitmap, the native asset of Bitcoin, and has 33,500+ unique addresses, making it the largest Ordinals asset community.
Many people are saying that Merlin is a bottom-up project, that is, first the ecology, the technology, and finally the L2. Instead of designing a public chain framework like other projects, and then slowly filling in the technology and narrative, a phenomenon caused by this is that users do not know when to issue coins or what to do, and will only be exhausted in various tasks of the project side.
Before Merlin Chain came out, the project party had Bitmap.tech done a lot of projects, such as: the earliest Recursiverse, Bitmap.Game, BRC-420 can be said to be one by one, not only free airdrop of all kinds of big hair, but also create ten times a hundred times or even a thousand times the opportunity, and the entire ecology is currently being promoted in the form of a game of chess.
Therefore, the investment institution ABCDE said in the article "Why We Lead the Bitmap.tech": Bitmap.tech has established the largest layer-layer asset community on the Bitcoin ecosystem, with 33,000 Bitmap holders, and the market value of the Bitmap.tech blue box has exceeded 200 million US dollars, second only to CryptoPunks and BAYC. These assets can have a rich asset reserve and user base on the first day of Merlin Chain's launch, and have advantages that other Bitcoin Layer 2s cannot match.
In addition to ABCDE, Merlin has also received participation from 24 institutions, including OKXVentures, Foresight Ventures, and Arkstream Capital.
Why is the BRC-420 Blue Box so market-capped, so many users, and so many institutions participating?
Let's take a look at what kind of role BRC, 420, the most important technology as the predecessor of Merlin Chain in the ecosystem, and figure it out, and we will be able to understand the next technical analysis article of Merlin Chain.
3. The Exploration of Bitcoin L2
(1) The possibility of realizing the Bitcoin ecosystem
As early as the early days of BTC, there has been an exploration of scalability for BTC, especially in the field of asset issuance.
As Bitcoin grew in popularity, network congestion and confirmation times increased, and in 2015 Bitcoin Foundation's Gavin Andresen and Mike Hearn announced that they would implement the BIP-101 proposal in a new version of BitcoinXT, hoping to increase the block cap to 8MB. BitcoinCore such as Greg Maxel, Luke Jr, and Pieter Wuille disagree, arguing that this approach raises the bar for running a full node and has uncontrollable impacts.
This concern is not unfounded, the community believes that 8MB will not be the final solution, once a large block is chosen, it is likely that it will eventually need to be continuously expanded, and the technical risk stacking and unpredictable risk caused by unbounded expansion do exist.
(2) Failed Bitcoin forks
The debate in the community over what exactly is the Bitcoin vision led to a split in the Bitcoin community, culminating in the split of the community in 2017 and the fork of BCH (which continued to split within the BCH community and forked BSV on BCH).
In addition to BCH (and later BSV), there were many other BTC splits during this period, with at least 50 new forks appearing in just a year after the BCH fork, according to BitMEXResearch. Many people turned over in these cents and coins, and many more people went bankrupt in this cents.
The debate in the community over what exactly is the Bitcoin vision led to a split in the Bitcoin community, culminating in the split of the community in 2017 and the fork of BCH (which continued to split within the BCH community and forked BSV on BCH).
In addition to BCH (and later BSV), there were many other BTC splits during this period, with at least 50 new forks appearing in just a year after the BCH fork, according to BitMEXResearch. Many people turned over in these cents and coins, and many more people went bankrupt in this cents.
As can be seen from the market where Bitcoin forked various tokens, scaling clearly does not work on the Bitcoin blockchain.
After the fork, the BTC chain has gradually introduced a series of new technical solutions to improve scalability while maintaining the existing block size, the most important of which are SegWit (Segregated Witness) and Taproot.
(三) Ordinals 萌芽
Segregated Witness was introduced at the same time as the BCH fork as an outright alternative to directly increasing the block size.
SegWit divides the transaction into two parts, the first containing the sending and receiving addresses, and the second holding the transaction signature or witness data, removing the main block but retaining the verification functionality. The removal of witness data allows for more transactions to be accommodated at the same block size, increasing throughput in another way.
SegWit was introduced as a soft fork and adoption continues to increase, surpassing 60% in 2020 and reaching 95% by December 2023.
In November 2021, another important upgrade, Taproot, also came into effect in the form of a soft fork. The upgrade is structurally a combination of BIP340, BIP341 and BIP342. Among them, BIP340 introduces Schnorr signatures that can verify multiple transactions at the same time, replacing the Elliptic Curve Digital Signature Algorithm (ECDSA), which once again expands the network capacity and accelerates the processing speed of batch transactions, providing the possibility of deploying complex smart contracts. BIP341 implements a Merkelized Abstract Syntax Tree (MAST) to optimize transaction data storage on the blockchain; BIP342 (or Tapscript) uses Bitcoin's scripting and coding language to accommodate Schnorr signatures and Taproot implementations.
SegWit initially did not limit the length of the verification information, which led to subsequent projects bypassing the 4MB block size limit by verifying the information, and also laid the groundwork for the subsequent rise of Ordinals.
There has also been controversy in the community, with some opponents arguing that SegWit's failure to set a length limit was a mistake, and that the use of validation information to pass data was an improper "attack".
(四) Bitcoin Layer2 的早期探索
With the various attempts to fight for the size of the Bitcoin block, there is no consensus on forks, scaling and other practices, so these roads will definitely not work.
The community began to look for a new solution, that is, to do a "block bridge", and later various L2 on Ethereum exploded, and the Bitcoin community called the way of "packaging and bookkeeping outside the main chain, and finally combining the packaged data back to the main chain for confirmation" as "L2".
The most popular routes of the early Bitcoin L2 solutions were the Lightning Network and Sidechains.
1、侧链(Sidechains)
The sidechain solution was proposed in 2014 by Blockstream, a technical paper on the Bitcoin sidechain solution, until January 2018, when RSK finally launched a fully functional mainnet, and in September of the same year, Blockstream launched the LiquidNetwork sidechain.
The idea of a sidechain is to acquire or send bitcoins from the Bitcoin network, but the transaction behavior is independent of the BTC network. In addition to RSK and Liquid Network, Stacks, RootsStocks, Drivechain, etc. are also sidechain solutions. In addition, developers have also explored and practiced in the direction of state channels and roll-ups.
This is the current direction of many Bitcoin L2 technologies, and it can be said that most of the Bitcoin L2 in the early stage were Bitcoin sidechains.
2、闪电网络(Lightning Network)
The Lightning Network was first proposed in 2015 by Joseph Poon and ThaddeusDryja, with the core idea of locking a portion of Bitcoin in a multisig address, thus creating a co-op protocol with separate jurisdictions. Transactions in the Lightning Network take place off-chain, and the final result is confirmed by the BTC network. In March 2018, Lightning Labs announced the official launch of the Lightning Network on the Bitcoin mainnet, representing applications such as Strike, Taro, Lightspark, and more.
Fourth, the BRC-420 that connects the previous and the next
Jeff, the founder of Merlin Chain, once revealed in an interview that in fact, the team did not think of doing Layer 2 at the beginning, but in the process of continuously building products and interacting with developers and users in the community, they found that the interaction that can be done on L1 is too limited, and many ideas cannot be realized, and the BitmapTech team happens to have the strongest native foundation in all Bitcoin Layer 2: BRC-420 Metaverse standards and copyright standards are defined for Bitcoin assets.
The BRC-420 was released on September 19, 2023, when the price was 0.15 U each, and rose to $1,000 on November 15, and the blue box price reached $40,000 on February 3, making it the third largest 10k series NFT on the market, behind BAYC and Punks.
From the price point of view, BRC-420 is not a very earth dog, many people did not understand it in the early stage, thinking that it was a soil dog, but after seeing it, I felt that his technical prospects were very high and he could do a lot of things, so let's take a look at the technical direction of BRC-420.
(a) Oral protocol
Before Ordinal, most people thought that BTC could only exist in the blockchain world as a financial attribute, because various attempts by previous developers ended in failure, so many people thought that it was futile to do any ecology on BTC, that is, only the Lightning Network and sidechain technology could make a small fuss, which was incomparable with the ETH ecosystem and other smart contract platforms such as L1.
After the Ordinal protocol came out, the concept of inscription was completely popularized in a few months, allowing people to see that it is possible to develop an ecosystem on BTC and surpass all smart contract platforms, and it can be seen from the inscription that where the community is, the consensus is there.
So what is the Ordinal protocol?
In a word, Ordinal is an inscription tool that uses BTC as a network disk, but it is engraved on the blockchain for everyone to see.
Just like if you write "XX comes here for a visit" on a brick, whoever goes to that scenic spot in the future can see this sentence.
The essence of Ordinal is actually very simple, it is more like an NFT protocol, but unlike ETH or other public chains, where NFT metadata (MetaData) is mostly stored in IPFS or centralized servers, Ordinal's metadata is embedded in the Witness Data field of the transaction, as if it is "inscribed!" to a specific Satoshi, which is also the source of the word inscription.
This is also the narrative and playing style of Ordinal-the beginning - BTC is not tampered with, the "network disk nature" of permanent storage, and the metadata can support text, pictures, videos, etc., in addition to the 4MB size limit (this limit is no longer there when talking about recursive inscriptions later, which is exactly the problem that Bitmap.Tech solves).
(二) BRC-20、ARC-20、Rune、BRC100SRC-20
The market has a new way to play, and naturally it will not only meet the needs of NFTs, developers have looked for various ways on Ordinal, and finally came up with a BRC-20.
1、BRC-201
The BRC-20 concept is to take advantage of the fact that Oridinal has no restrictions on file formats, and designs the concept of deploying JSON files on Oridinal, combining the three simple "opcodes" of Deploy, Mint and Transfer, and realizes ERC-20-like minting and transfer functions with the help of Indexer.
The role of the Indexer is a temporary and relatively centralized one that provides the basic settings for all BRC20 lookups on the Bitcoin chain, and indexes the number of BRC20 coins held by each person according to the situation of deploy, mint, and transfer.
After BRC-20, there are many new ways to play on the Ordinal protocol, such as ARC-20, Rune, BRC100, etc. They are all solving the shortcomings of BRC-20, and they are all writing Token information such as TokenID, output and quantity in the UTXO script, and handing over the transfer to the BTC1 layer to handle security issues.
2、SRC20
SRC20 originated from the BTC Stamps protocol and competes with the Ordinal protocol; Ordinal stores data in Segregated Witness fields, while BTCStamps stores data in BTC transaction output.
There is a picture on the Internet that can visually describe this passage:
Since SRC-20 does not have the possibility of being SegWit, it is favored and sought after by more developers in the West, and it feels like it is a weapon to counter the BRC20 system in the East, but its minting cost is higher.
(3) BRC-420
BRC-420 is the "BTC Metaverse Protocol" launched by the Bitmap.Tech team, which is different from the previous asset issuance protocols, BRC420 is more application-oriented and more complex.
Bitmap.Tech Jeff, the founder, once said: the team does and only does what we do and only does what does not appear in other ecosystems. In the early days, we did a lot of things based on recursion, such as recursive graffiti and recursive on-chain forums; Later, he made Bitmap, a fully decentralized data package; Then the BRC-420 was introduced.
According to the ABCDE paper, the BRC420 brings three interesting things:
1. Recursive inscription-type assets, BRC420 defines a more complex asset format through recursive means, by recursively combining multiple inscriptions into a complex inscription, anyone can create their own metaverse inscriptions, including but not limited to game images, game DLC, HTMI scripts, music, videos, etc... Finally, the "modularity of on-chain inscriptions" will be realized.
2. On-chain royalties, because there is a recursive modular asset call to each other, so as small as a character image or pet, as large as the entire game script, virtual machine and even AI large model can be combined into on-chain assets, at this time, a reasonable, automatic royalty system can well encourage the developer ecology, so that there are more valuable modules on the chain. For example, in a very popular full-chain game, if a popular combat system, card drawing system, blind box system, etc. can be used as a separate module inscription culture, the original author can also get tax income when it is called by other games.
3. Bitmap, Bitmap is a very "cool" and very hardcore thing, which can be understood as a BTC-based Sandbox land, but it is much more native than Sandbox. Because each .bitmap inscription maps every block on Bitcoin, the number increases synchronously with the block, and there are more than 810,000 bitmaps, increasing by 50,000 per year. Holder has more than 20,000 independent addresses, second only to Ordi and Sats.
Of course, BRC420 does not own Bitmap, but it is the biggest booster behind Bitmap, and it also monopolizes more than 95% of the traffic of the Bitmap browser, and more than 100 teams have issued assets in BRC420, which can be said to be an application protocol that is deeply bound to Bitmap.
Such an impressive achievement is inseparable from the decision of the Bitmap.Tech founder, Jeff, who believes that any new ecosystem needs to have its own narrative, and doing Ethereum stuff again in the Bitcoin ecosystem, or vice versa, seems to be uninnovative. Just like after the blue box became popular, a 420 protocol appeared on each chain, with boxes of various colors. We must do things that have not appeared before and create a new narrative in order for the Bitcoin ecosystem to develop. For example, if a lot of content on Ethereum is not on the chain, then we have to combine the content on the chain.
Here, I need to make a summary of the BRC-420:
brief summary
After the Ordinal protocol came out, due to its metadata support text, pictures, videos, JSON Files and other properties, it made it possible to develop the ecology in Bitcoin, but Ordinal did not solve the size limit of 4MB in Bitcoin blocks, and the subsequent BRC-20, ARC-20, Rune, BRC100, and SRC-20 are also solving the problem of deployment, which will bring a lot of idle trouble to the development of BitcoinL2;
BRC-420 was originally launched Bitmap.Tech as the "BTC Metaverse Protocol", due to its "recursive inscription assets", "coin conversion" and other characteristics, it can recursively combine multiple inscription assets into a complex inscription, so BRC420 can carry a variety of asset types far beyond BRC20, from a character image or pet to the entire game script, Virtual machines and even large AI models can be combined into Bitcoin on-chain assets for developers to purchase or pay royalties.
Due to the recursive nature of BRC-420, more than 1,000 project parties were attracted to issue their own BRC-420 projects on it, which made BRC-420 eventually become a project platform, and also played a role in the smooth launch of Merlin Chain's main network.
五、Merlin Chain 链的顺利推出
(a) The disruption of the BRC-420
As mentioned earlier, BRC-420 solves a lot of problems that are not solved on Ordinal, BRC-420 can combine all content on the blockchain through recursive inscriptions, which is a technological breakthrough, any can deploy content on BRC-420, including but not limited to game images, game DLC, HTMI scripts, music, videos, etc.
In the past, a lot of Ethereum's content was not on the chain, and all the content of Bitcoin, whether it is game content, application scripts, or social assets, all of these contents must be open-sourced on the chain on the inscription.
The BRC-420 takes advantage of the composability of on-chain content, open-source and modular content on the chain, and finally realizes assetization, paving the technical path for Bitcoin Layer2.
(2) From the perspective of product line, the launch of Merin Chain is bottom-up
Before Bitmap.Tech was ready to build Bitcoin Layer 2, the project team had already made Layer 1 ecosystems such as Recursiverse, Bitmap.Game, BRC-420, etc., which can be said to be one by one. It has attracted more than 90% of the traffic of Bitmap, the native asset of Bitcoin, and has 33,500+ unique addresses, making it the largest Ordinals asset community.
It can be said that Bitmap.Tech new narrative from asset to project has laid a solid foundation in the fundamentals of the Bitcoin system.
In this process, the community has mastered a considerable amount of assets, and the community hopes that the project can develop positively, so they all build this asset, unlike traditional blockchain projects, where the project party first has an idea, and then they allocate tokens and make products to attract more users.
Bitmap.Tech Jeff, the founder, once said in an interview: After the Ordinal protocol came out, although the market has been hot for a long time, there is a problem with the assets on Btcoin Layer1 that all users are playing new, and the previous asset has just finished playing, if it does not rise, everyone will run to the next asset to hit the new, and everyone has been busy, but they have not made money.
Assets that have risen very quickly and have a high market capitalization, most of which were from three months ago, are now difficult to produce new assets. The first is that the narrative is not new, the second is that the application scenarios are too limited, and the third is that the financial liquidity and leverage are too weak. Therefore, in order to make this ecosystem more prosperous, it is a rigid need to use a virtual machine environment to implement these functions.
Therefore Bitmap.Tech after all aspects are mature, MerlinChain will be issued to absorb the community and the previous ecosystem together to do greater things.
(3) From a macro point of view, Bitcoin Layer 2 is a trillion-dollar track
Bitcoin's funding volume has reached the size of an emergency, and the Bitcoin Layer2 marketplace has not yet been activated.
It can be compared - when the market value of Ethereum is two or three hundred billion, the total value of ERC-20 tokens is also two or three hundred billion dollars. BTC is a trillion-dollar market, but the total market value of BRC's tokens is less than $10 billion, and there is still 99 times the space in the middle of more than $10 billion to a trillion dollars, although this 99 times will not be filled for a while, but this is a potential market that no one can ignore.
Most of the projects of Bitcoin Layer 2 have just started, and there is no real leader yet, from the perspective of TVL, Merlin Chain is likely to become the leader of Bitcoin Layer 2, if Bitcoin Layer 2 is activated because of one or two head projects, this market potential can be much more than the money that can be leveraged by a dozen or twenty Ethereum L2.
As Jeff, the founder of Bitmap.Tech, said: Bitcoin L2 may play two roles, one is to do a good job of these underused finances in the past, and the second is how these native innovations on Bitcoin can be done better.
According to statistics, there are now more than 30+ BitcoinL2s, which are divided into several categories such as sidechain rollups and data availability.
For Merlin, how is it different from other BitcoinL2s, please see the next issue of Merlin Technical Analysis.