space（3-2）

The boss's second space is participated in with different layer2. The content is more macro-level. It is recommended to read. The following is a personal summary note. It is for sharing only and does not constitute investment advice. If there are any errors, please correct me.

1. Innovation on Merlin

1. Product innovation. I think technically speaking, to be honest, this innovation does not exceed the innovation on the second layer of Ethereum itself today, because everyone is using the EVM solution, so if there are more innovations, I think it may come from innovation in this product. In fact, it is the same as the early innovation of ordinarys. The first one has all the content engraved on the chain. The second is a more open source and fair asset issuance method. So when it comes to this kind of innovation, we actually hope to extend it from the first floor to the second floor.

2. Better asset support. That is to say, better support for Bitcoin assets. I just talked about the logic of the entire cross-chain bridge, including that we are now investing in and incubating the oracle in the entire Bitcoin ecosystem, because the oracle in the Ethereum ecosystem does not support Bitcoin assets very much.

3. Expected innovation. Is it possible to do something on the second layer that cannot be done on the first layer of Bitcoin and Ethereum? This is something we have been paying attention to for a long time. So I personally think that from the perspective of the chain itself, the second layer of Bitcoin today is actually learning from the second layer of Ethereum. I think this is beyond doubt. However, for the chain ecology, including how this chain can settle on the first layer of Bitcoin, this is the direction that all entrepreneurs in the Bitcoin ecology are constantly exploring.

2. Gains from going deep into the community

1. Respect users. You said that you have gained a lot in the entire ecosystem, which is actually okay, because we have just started, and there are still various problems. I think the benefits and problems of the web 3 industry are often interconnected. We think that in the Bitcoin ecosystem, the key is to respect the market and respect users. Because everyone has found that the better communities and better assets in Bitcoin now have relatively organic growth, and the issuance of assets is relatively fair. At the same time, when you make a new product, whether it is friendly to the users of your community itself, in other words, whether you can make the early users of your community make money, this is a very critical point. If the users who participated in and supported you in the early stage did not make money, the subsequent development of your community will be very difficult. It is a bit like the logic of word of mouth in the Internet era. That is, the value of users willing to spontaneously help you call more people to participate in this community actually determines the possibility of natural growth of your ecosystem.

2. Natural growth. So in the early days, we were very determined to support all kinds of assets to cross the chain to Merlin, whether it was ARC20, BRC420, NFT or Bitcoin in the ordinals. We found that its natural growth was very scary. For example, if you look at sats, the amount of our sats pledged far exceeds that of almost all exchanges on the market, and it should be only lower than the amount of sats of Binance at present. But in fact, we have never talked to the sats community and lobbied their big players to participate. I don’t know what kind of big players participated in the staking of sats in Merlin, but I think that the generation of this number is a kind of natural growth. To be honest, many people in the currency circle may not believe it, but we really don’t know what kind of big players participated in the staking of sats, so that so many people in this ecosystem can participate. So I personally think that because of the early participants in our ecosystem, their experience is still good. They also feel the respect and sincerity of developers for users. So they are willing to tell others that you can participate in this ecosystem. Because when a new ecosystem emerges, it is normal to face challenges, market bias and doubts. However, as long as the users in your ecosystem recognize you enough in the early stage, it can easily bring about natural growth.

So I personally think that the biggest gain is that when starting a business in the Bitcoin ecosystem, you really believe in organic growth. In other chains, you will find that they have a strong sense of design, that is, the ecosystem may force you to type in plain text, or force you to do French tech imitations, etc. You will find that this kind of forced thinking is not very sustainable in the end, and this may be some of my personal thoughts.

3. Security issues of layer2

I think that as long as you are in the blockchain industry, security is a double-edged sword. Because you require enough freedom, you can only protect your own security. In fact, there are many types of security issues.

1. Private key leakage. Nowadays, many users are prone to private key leakage. There is actually no way to prevent this problem. You can only protect your own information security by yourself, because if the private key is leaked, no one can save you. If someone gets your private key, they have the opportunity to dispose of all your assets.

2. Malicious authorization. In fact, for Merlin chain, we have issued a bounty very early, and then made a revoke product specifically for Merlin users. Whether using metamask or AA wallet, you can see which protocols you have authorized and can revoke them.

3. Malicious protocols. For example, the blast case just mentioned is that the protocol itself was hacked from the inside, which became a malicious explosion point. So we worked with five auditing companies including SlowMist very early on to form a Merlin security committee. Today, SlowMist's on-chain monitoring system was just launched to continuously monitor abnormal information on the chain. This includes the source of funds for this protocol and the direction of these funds. So it is actually online and in real time to help everyone discover this potential security risk. So I think for the entire ecosystem, it actually requires a lot of determination, patience, and cost to improve the security of the entire ecosystem.

4. User's personal security awareness. Users may need to pay more attention to the security of their personal information, because many times we see that when they click on a phishing website, they do not install a plug-in to intercept it, authorize malicious protocols, and leak private keys. I think this is something that many users of the Bitcoin ecosystem need to pay attention to. Because in the early days of Bitcoin, not many people targeted the Bitcoin community to launch such attacks. But now, because the entire ecosystem is constantly growing, this kind of thing has happened in the past and it is likely to happen again.

4. About the pressure of the rufi rune on the chain

I think there is a lot of room for optimization for a new chain. In fact, I am opening this space, but 90% of my energy is spent on chatting with everyone in the group about the current situation on the chain. So I am a little distracted.

I think it will take some time. The ZK rollup method and polygon CDK we use are not technologies that have been around for many years, but technologies that have just emerged. So actually, this series of problems, including the AA wallet we use, to be honest, is not an excuse. The technologies we use are the latest technologies on the market. We use an abstract way to connect the Bitcoin wallet to the EVM account, using the ZK rollup method of polygon CDK. Therefore, for each transaction, we need the entire proof network to perform zero-knowledge proof, including our support for these assets in the Bitcoin ecosystem, etc. So actually, after we use these new things, it will definitely be popular in the market. But at the same time, it will also have some unpredictable problems. Of course, these unpredictable problems will mainly drag down the performance of the chain, which is inevitable. So I hope everyone will give us some time, and we are now solving this problem.

V. The so-called decline of pledged assets

1. The core is to respect the market. Because where users are willing to put their money is actually determined by the market. If users feel that they can't make money with you, then they will naturally put the money somewhere else, right? Even if users feel that Bitcoin cannot rise as high as Ethereum, they will exchange Bitcoin for Ethereum. This is a natural law of the market. But I think the difference is:

First, Merlin launched the mainnet first and then started staking. So in the past two months, a large number of DAPPs have been launched. Including yesterday's Merlinstarter, today's Merlinswap, MP started trading, including the inscriptions on the chain now, the launch of Dragon Ball's LBP tomorrow, and the discussion with solv at ten o'clock about Bitcoin's POS and Yu'ebao. So the ecosystem itself has been developing continuously. In the past four days, the funds that entered Merlin from the cross-chain bridge, not the staking, have exceeded 300 million US dollars. So I think instead of considering whether the user's money will leave after the staking, it is better to consider whether new users and new money are willing to keep coming in when the mainnet is launched. If this is a positive thing, and newer users, more Dapp developers, assets and money are constantly entering it, then we can actually ignore the part of the pledged assets.

Second, Bitcoin users are very loyal. If their Bitcoin is on a chain, they don’t have many options. Either they stay on your chain or they go back to the next layer. For users, it actually depends on where they are willing to put their money to create more assets and bring them a more substantial return. Then users will naturally vote with their feet. This is also a view that we have always respected in the market.

6. Scattered Information

1. USDC and USDT have been released. For ETH, please refer to the previous space summary. The main reason is that polygon cdk does not support it and cannot be released. In addition, the asset pledge will be returned to its original location after expiration. The merl token is on the second layer.