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Although Bitcoin-based decentralized applications (dapps) have been known to replicate or copy Ethereum dApps, Jeff Yin, founder of Merlin Chain, believes there is a growing impetus to build bitcoin dapps that are distinguishable from ether-based dapps. Yin, however, noted that the synchronization between bitcoin-based dapps and the Ethereum Virtual Machine (EVM) dapps still benefits the industry by way of unique and innovative solutions that leverage the strengths of both ecosystems.
Leveraging the Strengths of Bitcoin and Ethereum Ecosystems
In the long term, solutions that leverage the strengths of both ecosystems could potentially attract more users and developers, making the entire cryptocurrency industry more robust and diverse. The Merlin Chain founder downplayed the impact of the recent surge in Bitcoin network fees, where transaction fees exceeded $50. The founder drew parallels with how the idea of Ethereum layer 2 was initially ridiculed but later turned out to be a key move.
Meanwhile, Yin described U.S. politicians including Donald Trump’s endorsement of cryptocurrency and Bitcoin as “a positive development for the entire industry.” Yin also linked the U.S.’s changed attitude toward cryptocurrency to the country’s expanding crypto community. The Merlin Chain founder additionally discussed how the Taproot and Segwit upgrades have enhanced the Bitcoin network’s functionality and efficiency.
Below are Yin’s answers to the questions sent.
Bitcoin.com News (BCN): The Ethereum and Bitcoin networks represent two distinct facets of the blockchain universe, each with inherent differences in code and community. In what ways are Bitcoin-based decentralized applications (dapps) different from ethereum virtual machine (EVM)-based dapps? Additionally, how could the cryptocurrency industry benefit from synchronization between the two ecosystems?
Jeff Yin (JY): Bitcoin-based dapps often replicate Ethereum dapps, providing similar services such as decentralized exchanges, lending protocols, and oracles. This duplication is necessary for building a robust ecosystem on Bitcoin layer 2s. However, there’s a growing interest in building unique and innovative Bitcoin dapps, leveraging native innovations from Bitcoin’s Layer 1, to differentiate the Bitcoin ecosystem. These dApps often include more native Bitcoin features, like Ordinals and Runes.
The industry could benefit from synchronization between Bitcoin-based dapps and EVM-based dapps by fostering unique and innovative solutions that leverage the strengths of both ecosystems. This could move the industry beyond the simple replication of existing dapps. These original solutions could potentially differentiate their ecosystems, which could attract more users and developers, making the entire cryptocurrency industry more robust and diverse.
BCN: The so-called Taproot and Segwit were enabled on the Bitcoin blockchain which resulted in more efficient utilization of space between blocks. Some believe these advancements could spur increased cryptocurrency adoption at the institutional level. Do you agree with this assertion?
Jeff Yin (JY): Yes, I do concur with this assertion. The upgrades like Taproot and SegWit on the Bitcoin blockchain have considerably enhanced the functionality and efficiency of the network. Taproot enhances privacy by making complex transactions indistinguishable from simple ones, while SegWit reduces the size of transactions, allowing more of them to fit into a block. These upgrades not only help in improving the scalability and privacy of Bitcoin transactions but also drastically reduce transaction costs.
Efficient utilization of block space makes it possible to include more content, which has led to the emergence of strong consensus assets at the BTC Layer1 level like Ordinals (Brc20, Brc420) and Runes. These assets benefit from the more efficient use of space in the Bitcoin blockchain. As a result, it’s not just about sending and receiving bitcoin anymore. It enhances the functionality of the Bitcoin network and allows it to be used in a wider range of applications. This has led to a surge in interest in the capabilities of smart contracts among Bitcoin ecosystem users.
BCN: The innovative concept of attaching assets to the Bitcoin blockchain is accompanied by dynamic architectural advancements. What were some of the insights and obstacles encountered during the initial development of the Merlin Chain?
JY: When launching the $MERL token, our preparations for asset bridging were insufficient. Merlin Chain supports a wide range of assets, including BTC, BRC-20, NFTs, ETH, USDT, and Manta, which adds complexity to the bridging process. Initially, our approach was less cautious, integrating various protocols.
Actually, for BTC, our bridging is very stable, with around 190,000 BTC bridging in and out the past month, second only to Binance and Coinbase. However, for assets like NFTs, runes, Manta, Tron, and MODE, as well as some Layer 3 assets, the complexity has exceeded our control. When we try to integrate everything from the start, it leads to an inferior user experience.
After some effort, we made all assets fully unstakeable, and our ecosystem project Unicross improved rune bridging. We’re now turning these challenges into strengths.
BCN: The introduction of Ordinals and token standards such as BRC-20, BRC-420, and ARC-20 has enabled users to record assets on the Bitcoin blockchain. However, there are several other innovative use cases now possible with Bitcoin. Can you list some of them and explain what they do exactly?
JY: The Runes protocol offers advantages such as pre-mining, block distribution and flexibility of which blocks can be mined – creating a more streamlined, fluid trading experience for users.
The key challenge for Runes, however, is balancing flexibility with the complexity of evaluating these assets. Unlike BRC-20, which is simple and straightforward to evaluate because of its token total, determining the value of Runes assets is a more involved process.
Merlin Chain has greatly improved the trading experience for Runes assets. By operating at Layer 2, it reduces transaction costs and increases transaction flexibility – making it an ideal platform for the thriving Runes ecosystem. With Merlin Chain, Runes trading is becoming more efficient, secure, and accessible for all users.
BCN: Transaction fees on the Bitcoin network have recently soared, with some reports indicating that they have surpassed $50. This increase comes despite the emergence of ordinals and other innovations on the blockchain. While higher fees may be a welcome development for miners, who have seen their revenues decline due to reduced block rewards, such elevated costs could render Bitcoin impractical for everyday transactions. This situation seems to contradict the principles outlined in the Bitcoin whitepaper. In your opinion, what do these developments say about the future of Bitcoin?
JY: Bitcoin is experiencing growing pains but is also adapting. The surge in transaction fees is indeed a concern, especially for everyday use. However, innovations like layer 2 solutions and Lightning Network are improving these issues. They suggest that, despite the current challenges, Bitcoin’s future could see it becoming more versatile and cost-efficient.
I think people should be patient, like when we saw Ethereum in 2017 and people brought up the idea of layer 2s, many people laughed at it, and even when we had Ethereum, many Bitcoin users laughed at this kind of idea, right? They thought Bitcoin is all we needed, we didn’t need Ethereum.
BCN: We have been observing a shift in the United States’ tone and stance toward cryptocurrency. This shift is best exemplified by the bipartisan support for crypto regulation in the U.S. Congress. What factors do you believe have contributed to this shift? Additionally, how do you view crypto influencers openly endorsing certain politicians in the upcoming U.S. elections?
JY: This is a positive development for the entire industry. The crypto community is expanding, which is why there has been a shift in the U.S.’s attitude towards crypto ahead of the elections. The listing of the ETH ETF is only a matter of time. We’ve seen political-related memes such as Trump’s and the recently viral $BODEN. I believe this is beneficial, as these occurrences highlight the role of the attention economy, making crypto an attention-grabbing medium much like Tiktok. This has the potential to attract more new users to the crypto industry.
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