Original author: @cyy7025219
Original source: X
Note: The original text comes from a long tweet posted by @cyy7025219.
The content of the boss's second space is relatively macro, but you can read it carefully. This is the space of Bitcoin layer 2, and it is the basis for you to gain huge profits. The following are personal summary notes. They are for sharing only and do not constitute investment advice. Please correct me if there are any errors.
1. Merlin’s interesting directions
1. Bitcoin ecological users. First of all, the opportunities and difficulties faced by Merlin are relatively unified, that is, people in the Bitcoin ecosystem are not familiar with and do not understand the second-layer EVM, which also includes disapproval. For example, when we launched staking, many people in the bitmap community said, i will never stake my bitmaps to any layer2, including some other assets. Of course, from my point of view, I think it is rather nonsense, because if you support the pledge of this asset, then after others pledge it, the liquidity will be reduced, and you can sell it at a higher price. If you pledge it yourself, You can get airdrops of merlin’s online tokens. In fact, everyone has calculated that if you had pledged it at that time and did not consider the merlin airdrop, you would have made a lot. So no matter how you look at it, you should support this matter, including putting your bitmap on the first layer. You can't do anything else except sell it. You can only watch it. On the first layer, it is an asset. However, when this asset reaches the second level, its usability will become much greater. Whether it is defi or gamefi, to mine more new assets, its usage efficiency will be much higher and its applications will be much more, so I can’t think of why not Pledge to the second floor. Therefore, for users of the Bitcoin ecosystem, I am more optimistic about applications that allow them to experience the convenience, innovation and fun brought by the second layer. I am very optimistic because many of them have never used EVM wallets. When they experience the EVM chain for the first time, they will think that I can do this and do all kinds of interesting things with my assets. Get a variety of rewards. If there are these applications that can make Bitcoin users feel the fun of merlin, I am very optimistic about it. Including the most basic dex, lending, staking, game social networking, etc.
2. Ethereum users. They don’t understand the Bitcoin ecosystem, and they don’t know why the inscription on the Bitcoin ecosystem was so popular last year. They thought this inscription was a joke from the beginning, just to let the Bitcoin layer be able to issue coins. They may know that BRC20 is popular and runes is popular. So if there are some applications that can make them feel happy in the Bitcoin ecosystem, I think these applications are also interesting. For example, a more transparent and fair launch, and more ways to remove the project side after the content is uploaded to the chain, including the natural bottom-up community culture of Bitcoin. In fact, these are things that Ethereum users have never experienced before, so I am more optimistic about these two types of applications.
I pay more attention to users, that is, users to learn and explore. If the die-hard Bitcoin fans can experience the happiness of Merlin, or the users of Ethereum can experience the happiness of Bitcoin, this is what I want to see most. The other thing is security. I hope that all Merlin projects can submit audit reports to the security committee or complete the audit.
2. Opinions on whether defi on Bitcoin layer 2 can awaken sleeping funds
1. The stage of making inscriptions. I think this matter is dynamic, because we felt something when we made inscriptions last year. In Singapore, we are embarrassed to say that we are making inscriptions, because the first reaction of friends around us is to laugh, which is very embarrassing anyway. Because everyone feels that this thing has no market prospects and no technological innovation. It is just a concept created by a bunch of people staring at Bitcoin. Later, many inscriptions were put on the leading exchanges, the market rose, and everyone’s attention It becomes higher, but you will find that it is still limited to the circle of traders, and everyone says which one can be traded.
2. The stage of making the second layer. Later, we started to do layer2. At the beginning, many people laughed and said, "You are doing Bitcoin layer2. Isn't this because many Bitcoin OGs have been around for a long time? In the market, they will think this is a scam, including now Too. Of course, it’s the butt that determines the head. What he invested may not be a scam, but what he didn’t invest is a scam. Anyway, this is the overall feeling of everyone in the market.
3. New trends. Later, I discovered that various projects at home and abroad have come up with different solutions, whether it is the number of users on the chain, TVL or developers. After gradually rising, many really sleeping Bitcoin whale gates, they also Will pay attention. He will feel that when he talks about it, it is a bubble, but when he does it, it becomes a bubble that can be touched, and the feeling is different. Going forward, there will be a variety of applications, including those for stablecoins, dex, defi, oracles, the Bitcoin DA layer including cdefi, lending, and various infrastructure based on the Bitcoin ecosystem. Ecological core protocols and ecological core products. After constantly springing up like mushrooms after a rain, you will find that the real Bitcoin maxi or dormant funds are actually ready to move. Because the market value of the entire Bitcoin, other than itself, is actually very small today. Whether it is layer2, layer3, oracle, dex, or all kinds of basic applications, in fact, its market value Most likely no lower than Ethereum. At least the market value of the leading project is likely to be no lower than that of Ethereum. If you look at the current market value of the Ethereum layer, even the oracle machine is worth tens of billions of dollars, including the market value of the DA layer like tia, which is also worth tens of billions of dollars.
Therefore, when such an opportunity appears and the bubble becomes more and more real, these sleeping funds may not be willing to miss such an opportunity. They know that the earlier they come in, the lower the risk and the higher the return. So this trend is our personal experience in the entire process from inscription to Merlin. Including us, we found that many mining pools and mining machine companies, let’s not name them for now, will actively move their native Bitcoin business to Merlin, in a way that combines cefi and defi, institutional needs, and user needs. Product presentation (you can see the class representative’s summary before, there is also this content, you can look forward to this product).
To sum up, the funds that are basically sleeping either hope to get a wave of dividends from zero to one in the morning, or they can do it themselves and expand their business on the chain. So this thing is bound to happen. We have already seen these trends on the front line of the industry. I think there will be many interesting things like this happening in the next 3-6 months.
3. How to treat MEME Coin and Bitcoin MEME Coin
We are professional in making MEME coins. After all, the most abstract MEME may be the blue box. It seems that there was no box MEME track before, and we have also broadened a new track.
1. MEME is a requirement. MEME is definitely a demand. When we were working on Inscription last year, I felt that MEME was a demand. No one was willing to accept orders from institutions because the institutions’ coins were listed on the exchange. Once they came up, there would be 10 billion to 20 billion FDV. This When retail investors take over the market, how many times do you expect it to win? Three times, five times, ten times. That is very difficult. Therefore, these new retail liquidity are more willing to play MEME, which is established.
2. Fair launch of Bitcoin MEME. MEME on Bitcoin is about fair launch. If you calm down and think about it, the tokens on the first layer of Bitcoin are actually MEME. Whether it is BRC20 or ARC20 or SRC20, as well as the runes protocol to be released below, they are all MEME. So in the past, we have been reluctant to talk to you about the technical innovation of these asset protocols. Whether it is inscription or UTXO, Lightning Network or RGB, it is a MEME in itself, because on the first layer, its assets are only storage and transactions. The function can naturally only be MEME, whether it is sats, ordi, atomicals, or runes.
3. Liquidity of Bitcoin MEME. One problem on the first level is poor liquidity. Whether it is the transaction channel, method, gas, confirmation time, including the experience of the pending order system, you will find that its liquidity is naturally very poor, so you will encounter a problem. , he actually only has a few coins to become popular. For example, ordi was very popular at the time, and sats was very popular later, but objectively speaking, the entire rising process had certain obstacles. I think this is what all Bitcoin users must face. Therefore, coupled with the experience of the pending order system, the growth rate of MEME on the Bitcoin layer is slower than that of other chains. You can often see that, for example, whether it is the previous BNB or Solana, a meme may really grow overnight. Thousands of times. I believe that many Bitcoin users today are unable to reach this kind of mythical story and yearn for it. Every day I see people talking about when Bitcoin will be able to create an asset that can grow 500 times a day. This is impossible due to liquidity.
So if this is a mission of Merlin, it is to allow these MEMEs that are launched more fairly and have the spirit of Bitcoin to have better liquidity and faster trading venues. This is also the first time we are now supporting runes cross-chain bridges. Index trading markets, including wallets. Secondly, we also hope that there will be more creative projects that are willing to support fair launches that are 100% transparent to users. They can make such products in Merlin, including new users who will be more degen and unfamiliar with the gameplay of defi. If you experience the meme transaction of sola, you will find that the entire process and gameplay are different from before. Same. It's just like a gambling machine. It's a very simple experience of inserting coins and winning, especially the IQ50 gameplay. So I think if Merlin comes up with a good meme, the infrastructure and the most basic products must keep up. This is what we are working hard on during this period.
To sum up, I think the meme itself is reasonable, and the culture of the meme itself on Bitcoin is also very unique, but it needs a place with better liquidity, which is also the next mission of merlin.
4. Understanding whether it is innovative to expand Bitcoin through EVM
1. The three stages of the second layer of Bitcoin. Today I think everyone talking about the second layer of Bitcoin is more of a propaganda. Those who know us know that our interviews and space say that everyone today is a side chain. The so-called side chain means that it does not follow anyone. To share security and consensus, you can only believe whether the chain's own consensus is strong enough. So next I think the second layer of Bitcoin will go through three stages.
First, by exposing the transaction data on the chain, the so-called ZKP, to a third-party DA, everyone can check that the transaction data is correct and the status is correct.
Second, there is a need for more centralized verification nodes to ensure that the chain is not centralized, because all Bitcoin layer 2 is a centralized sequencer because it can be shared with the Ethereum layer. If I were a side chain, the chain itself would actually need to be sufficiently decentralized. The so-called decentralization is enough, at least it can slowly expand its own decentralized nodes like polygon and bnbchain.
Third, today everyone is looking forward to making Bitcoin itself Turing complete through bitvm or other methods to verify whether the second-layer transaction data is correct. This thing itself will take a certain amount of time, because today there is no second layer or strategy of Bitcoin that can achieve this thing. So in fact, from Ethereum to Ethereum side chain, to op to zk, including the current zk rollup, it is still immature and has been gone for many years. So today’s second-layer concept of Bitcoin is just the beginning, more like a brand promotion.
2. Regarding innovation. I think the word technological innovation often goes against the spirit of blockchain. For me personally, the spirit of blockchain that I understand is build on top of each other, which is to continue to innovate based on the innovations of others. So today many people come out and say they want to be the killer of Ethereum. They want to create a new virtual machine environment and language to implement Ethereum. I personally think it is a betrayal of the spirit of the blockchain, so the reason why we chose to use EVM to do the second layer of Bitcoin at that time was because we actually felt that the EVM implementation was good enough and had been tested tens of billions of times. There is no need to reinvent the wheel, rewrite the virtual machine and language for the sake of technological innovation, and then force developers to use his architecture. Then your security is often not as good as EVM, so I think all these Bitcoin Whether side chain or second layer, the system using EVM embodies a blockchain spirit, which is not to reinvent the wheel and continue to do it on the basis of others.
3. Regarding long-term technological innovation. What is long-term technological innovation? I think this question is a matter of different opinions. Because the demand of users today is the release of liquidity on Bitcoin. I think all products serve the needs of users. In this kind of service, because Bitcoin itself is decentralized and there is no Satoshi Nakamoto giving orders here, competition in the entire free market will definitely spawn it. technological innovation. Technological innovation certainly does not appear by one person writing a paper at home, but by the huge market demand and with the free competition in the market, some new technological innovations have emerged, so it remains to be seen whether there will be long-term technological innovations.
