This pioneers Bitcoin into the decentralized finance (DeFi) ecosystem, allowing bitcoiners the opportunity to earn yields and participate in the broader DeFi ecosystem.
Merlin Chain, a native Bitcoin Layer 2 blockchain, announced the launch of its proof of stake (POS) mechanism and DeFi integrations to offer BTC holders unprecedented yield opportunities across the DeFi ecosystem. The platform pioneers BTC integration into the DeFi ecosystem, allowing BTC holders to earn staking rewards and access lucrative yield opportunities including yield farming and lending/borrowing opportunities.
Merlin Chain’s POS mechanism and innovative DeFi integration are designed to provide BTC asset holders with access to unlimited DeFi opportunities, which opens up the way for Bitcoin to challenge Ethereum in the DeFi space. Over the years, Ethereum (and other crypto holders) have enjoyed the capabilities of DeFi through various yield-generating avenues from staking rewards to liquidity mining, and yield farming, and Merlin Chain targets to bring similar capabilities to BTC holders.
Merlin Chain Founder Jeff Yin believes the latest innovation brings BTC to level terms with Ethereum in the DeFi space, finally giving them an opportunity to earn yield.
“Everyone knows bitcoin has been one of the best-performing assets over the past decade, hilariously detonating the cynical predictions of many anti-crypto critics, but holders have missed out on yields that other ecosystems provide,” said Jeff. “We are therefore delighted to finally grant BTC investors and hodlers concrete incentives to not just HODL, but earn and participate in the exciting DeFi ecosystem!”
To take advantage of DeFi yield opportunities as a BTC holder, users must first bridge their BTC coins to the Merlin network via its Merlin bridge (still in beta). Once bridged, the BTC assets will be locked on Bitcoin’s Layer 1 and exchanged for gas BTC which can be staked into Merlin’s PoS mechanism. This process generates M-BTC, a wrapped bitcoin asset that earns staking rewards akin to stETH.
The M-BTC tokens can now be used freely across Merlin-supported DeFi platforms. This allows users to stake their “synthetic BTC” into DeFi platforms to earn rewards, supply liquidity and earn yields, explore lending/borrowing opportunities, and bridge SolvBTC assets out to Bitcoin Layer2 networks like Linea to earn rewards. More capabilities are set to be added in the near future, the team statement confirms.
“The use cases we have unlocked effectively mimic those of Ethereum’s mature DeFi ecosystem,” added Jeff. “Only now, they are powered by the security and scarcity of the Bitcoin network, and tap into probably the most ardent crypto user base that exists.”
Since April this year, Merlin Chain has witnessed massive bridging requests with over $13 billion worth of BTC bridged to and from its network. Additionally, the platform has distributed over $700 million worth of BTC to other Layer 2 networks offering complimentary rewards. The platform has over $2.7 billion worth of crypto assets locked, supported by leading crypto custodians including Fireblocks, Asia’s largest custodian Cobo, Ceffu, and Bitmain subsidiary Antalpha.