Merlin Chain Faces Criticism Over Failed Airdrop and Layer 2 Claims
Merlin Chain, once praised as a promising Bitcoin Layer 2 project, is now facing scrutiny after its airdrop failure led to a significant drop in its token value from around $1 to $0.15. The disappointment arises from the Bitcoin mainnet’s incapability to execute smart contracts, undermining Merlin Chain’s initial claims. Research firm Messari has clarified that Merlin is essentially a Bitcoin-native asset EVM sidechain, not a true Layer 2 solution, due to its off-chain operations unsupported by Bitcoin’s robust security features. Challenges remain in crafting valid zero-knowledge proofs through zkProver for integration with the Bitcoin mainnet. The project is progressing, partnering with BitcoinOS and Nubit to address these issues. However, until these are resolved, Merlin Chain functions mainly as a sidechain without the full security and trustlessness expected from a true Layer 2 solution. This situation highlights the marketing exaggerations about Bitcoin Layer 2 potential and indicates the substantial technical work required for viable solutions. For crypto traders, this emphasizes the importance of cautiousness with projects claiming Layer 2 capabilities on the Bitcoin blockchain amidst uncertainties.
Bearish
The news about Merlin Chain reveals significant technical limitations and failed initial promises, which likely lead to negative sentiment in the market. The failure of the token airdrop and the questions surrounding its Layer 2 legitimacy could deter trader confidence in the short term, reflected by the drastic fall in token value. In the long term, unless the project overcomes these technical challenges and proves its validity, the market perspective may remain cautious and bearish. The hype around being a Bitcoin Layer 2 solution is tempered by the intricate technical requirements and current inability to deliver on those promises, suggesting traders may adopt a more skeptical approach toward similar projects.