---
name: bitcoin-l2-merlin
description: |
  Merlin Chain: largest Bitcoin L2 by TVL (2026), ZK rollup with
  EVM, 150+ dApps. Federation peg with planned trust-minimization.
  USE WHEN: evaluating Merlin for deployment, BTC DeFi.
allowed-tools: Read, Grep, Glob
---

# Merlin Chain

Bitcoin L2 with EVM compatibility. Largest TVL among Bitcoin L2s
(early 2026, ~$1.7 billion in locked assets, 150+ dApps deployed).

## Architecture

- **ZK rollup** posting state commitments to Bitcoin.
- **EVM execution**.
- **Federation peg** for BTC bridging.
- **Native token**: MERL.

## Ecosystem

- **DeFi**: lending, AMMs, stable coins.
- **Inscriptions / Ordinals integrations**.
- **Cross-chain bridges** to Ethereum L2s.

## Position

The "leading TVL" Bitcoin L2 in 2025-2026, though TVL is partly
inflated by yield-farming incentives. Critique: heavy reliance on
federation for now, slower path to trust-minimization.

## Use cases

- **BTC yield products**.
- **EVM dApps** with Bitcoin-themed user base.
- **Cross-chain liquidity hubs**.

## Limitations

- **Federation trust** — large concern given size of TVL.
- **TVL likely inflated** by mercenary yield-farming users.
- **Centralization concerns** common to early L2s.

## See also

- [bitlayer/SKILL.md](../bitlayer/SKILL.md)
- [bsquared/SKILL.md](../bsquared/SKILL.md)
- [hemi/SKILL.md](../hemi/SKILL.md)
- [bob/SKILL.md](../bob/SKILL.md)
