Merlin Chain, a Layer-2 blockchain, has announced it’s working on bringing new yield opportunities for Bitcoin (BTC) traders, according to the information shared with Finbold on June 12.
With its Proof-of-Stake (PoS) consensus mechanisms and a suite of innovative decentralized finance (DeFi) solutions, Merlin Chain aims to provide bitcoiners with the chance to earn staking yields and access a range of DeFi services.
Enhanced yield for Bitcoin holders
For years, Ethereum (ETH) investors have enjoyed various yield-generating avenues such as staking rewards, liquidity mining, and yield farming.
In contrast, holding BTC has not offered similar benefits, apart from the asset’s gradual appreciation.
Merlin Chain Founder Jeff has emphasized the strong market position of BTC while highlighting the surprising lack of yields its holders enjoy:
“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. 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 leverage Merlin Chain’s yield opportunities, users will bridge their BTC to the network using the Merlin Bridge.
That involves locking BTC on Layer1 and receiving gas BTC, which can then be staked into Merlin’s PoS mechanism to generate M-BTC, a wrapped bitcoin asset that earns staking rewards similar to stETH.
Bitcoin holders can stake M-BTC on DeFi platforms like Solv Protocol to earn SolvBTC and access various DeFi services.
Moreover, they can supply liquidity to earn yields from Merlin-integrated protocols and explore DeFi primitives such as lending, borrowing, and engaging in derivatives and other DeFi activities with BTC.
Additionally, they can bridge SolvBTC assets to Bitcoin Layer2 networks like Linea to earn extra rewards.
A new chapter for Bitcoin and Merlin Chain
Merlin Chain has already bridged over $13 billion worth of bitcoin in the last month and a half and distributed over $700 million worth of BTC to Layer2 networks.
The platform has also partnered with leading crypto custodians, such as Fireblocks, Cobo, Ceffu, and Antalpha.
In total, Merlin Chain collaborates with over ten major institutions to scale participation and decentralize the network’s validator set.