Layer 2 blockchain Merlin Chain has announced that Bitcoin (BTC) holders can now earn staking rewards and access lucrative Decentralized Finance (DeFi) opportunities. Designed from the start as a Bitcoin L2 solution, Merlin Chain addresses the gap where Bitcoin users have missed out on yields available on other chains.

Bitcoin Aligned with Ethereum

Merlin Chain aims to provide yield opportunities to Bitcoin holders, distributing over $700 million worth of BTC to Layer 2 networks offering rewards. In the past 45 days alone, more than $13 billion worth of BTC has been bridged to and from its network.

Merlin Chain employs a Proof-of-Stake (PoS) consensus mechanism combined with innovative DeFi integrations, aiming to elevate Bitcoin to the same level as Ethereum in terms of staking yield offerings. While Ethereum investors have enjoyed various yield-generating opportunities, Bitcoin has lacked such incentives. Merlin Chain seeks to change this by providing Bitcoin holders with concrete incentives.

“Bitcoin has been a top-performing asset, defying skeptics, but its holders have missed out on yields offered by other ecosystems,” said Merlin Chain Founder Jeff in a statement. “We are excited to provide BTC investors with opportunities to earn and participate in the DeFi ecosystem.”

Benefits for Bitcoin Investors on Merlin Chain

Bitcoin users on Merlin Chain can stake M-BTC, a wrapped Bitcoin asset, to earn staking rewards similar to stETH. Jeff highlighted the security and scarcity of the Bitcoin network as a significant advantage. M-BTC staking integrates with DeFi platforms like Solv Protocol, allowing users to earn SolvBTC and access various DeFi services.

Users can also supply liquidity and earn yields from DeFi protocols integrated with Merlin Chain, explore lending, borrowing, derivatives, and other DeFi primitives with BTC capital. Additionally, they can bridge SolvBTC assets to Bitcoin Layer 2 networks like Linea to earn rewards.

To access these services, investors must bridge their BTC to the network using the Merlin Bridge, lock it on Layer-1, and receive gas BTC, which can be staked into Merlin’s PoS mechanism to generate M-BTC.