Merlin has become the largest Bitcoin sidechain, with a total locked value exceeding 1 billion US dollars

Speculative point mining activities in the Bitcoin blockchain ecosystem have surged, with Merlin leading this trend. A month ago, the little-known Merlin has grown by 2,000% in the past 30 days. According to data from DeFiLlama, its total locked-in value (TVL) now exceeds $1 billion, making it the largest Bitcoin sidechain. This puts Merlin ahead of mature first-layer sidechains like Avalanche and Polygon.

More than half of Merlin's $1 billion is stored in Solv Finance, a protocol that allows users to deposit wrapped bitcoins and earn "Solv points". Solv and Merlin are currently running a promotion encouraging users to farm points and tokens. In the cryptocurrency world, points are valueless participation records that often determine future token airdrop allocations. After recent airdrops converted points into large amounts of tokens related to Solana and EigenLayer, point farming has found its footing in the Bitcoin ecosystem.

Last week, Merlin also air-dropped its native token MERL to users. However, since listing on CoinGecko,the token has fallen nearly 40%. As a second layer solution for Bitcoin,Merlin integrates zero-knowledge proofs with the Bitcoin blockchain through Taproot.This integration significantly improves transaction privacy and efficiency.Unlike Ethereum's zk rollups which verify proofs on-chain ,Merlin's proofs are verified off-chain by decentralized oracle node network,and then batch submitted to bitcoin blockchain via Taproot.This off-chain data processing ensures scalability and security without overloading mainnet due excessive data.

The growth of Merlin indicates that interest in speculative uses for bitcoin has reignited beyond price alone.Runes represent an evolution of Ordinal inscription concept,went live at halving time,and led soaring network transaction fees.Venture capital long skeptical about bitcoin started flowing into this ecosystem.Besides merlin,a race is underway attract liquidity for second layer solutions.Another second layer solution Stacks just completed Nakamoto upgrade,attempting to make its product faster and more reliable.