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Merlin Chain: How does technology design challenge the blockchain impossible triangle?

24-04-16 21:18

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Original source: Crypto Researcher

In this round of market, Bitcoin has taken the lead, and the emergence of new protocols and token standards such as BRC-20 has begun to release the potential of the Bitcoin economy, allowing us to glimpse in advance that trillions of dollars of dormant capital may be unlocked. In order to solve the scalability problem of Bitcoin, Layer 2 is highly anticipated. Ecological participants and investors are looking forward to it being able to act on Bitcoin assets, inheriting Bitcoin's reorganization security and finality while overcoming its limitations in programmability and performance. Among the many Layer 2s, Merlin Chain, which carries 3.5 billion TVL, is undoubtedly the most concerned. This article will focus on the technical architecture of Merlin Chain, based on the impossible triangle of blockchain - security, decentralization and scalability, and also adds a dimension that is generally considered difficult to achieve - interoperability, to explore how the technical design of Merlin Chain can achieve the best trade-off between different dimensions.

Security & Scalability of Technical Solutions

Merlin Chain proposed a solution based on Taproot's aggregated zero-knowledge proof and Rollup data written to the Bitcoin mainnet. All second-layer data will be submitted to Bitcoin's first layer for security verification. This means that any problems on the second layer, whether fraud or errors, will be discovered and prevented by the first layer. Its key components: nodes, zkProver and database work together to process and exchange data to confirm the validity of the entire transaction process, thereby ensuring the secure processing, verification and completion of data storage of transactions.

Node: responsible for processing and transmitting transaction data, as well as interacting with zkProver and the database

· Send the contents of the Merkle Tree to the database and store it

· Send the input transaction to zkProver for processing

· Interact with zkProver to ensure the validity and correctness of the transaction

zkProver: Generate zero-knowledge proof using SNARK technology to prove the validity and correctness of the transaction

· Contains 13 state machines, divided into main state machines and sub-state machines (such as BinarySM, StorageSM, MemorySM, ArithmeticSM, etc.)

· Perform complex mathematical calculations, use PIL (Polynomial Identity Language) to describe the state transitions and constraints during the transaction execution, convert them into polynomial constraints or polynomial identities, and verify them on the smart contract

· Interact with nodes and databases to obtain information to generate verifiable transaction proofs, including Merkle Root, related sibling keys, hash values and other information

· Send the generated transaction proof back to the node for further verification and record by the node to ensure the legitimacy and security of the transaction

Database: used to store important data, such as the content of the Merkle Tree and transaction information

· Receive and store the content of the Merkle Tree sent by the node

· Provide zkProver with the information required to generate transaction proofs

This allows Merlin Chain to:

· Inherit the security of Bitcoin Layer 1 and provide L2 Batch processing scalability to ensure that data is anchored in Bitcoin and cannot be tampered with

· Use ZK proofs and zkSNARK technology to reduce L1 space consumption and optimize transaction costs

· Ensure fast finality of transactions through frequent validity proofs, and achieve scalability through recursive STARK to cope with high concurrency and large-scale user needs

In addition, Merlin Chain will adopt the zero-knowledge proof (ZKP) two-step submission mechanism proposed by Lumoz in the future to achieve decentralized PoW, thereby effectively incentivizing miners to stay online, ensuring a stable computing environment, and further enhancing the security and reliability of the network:

· Prevent racing attacks: Prevent malicious participants from attempting to interfere with or disrupt the normal operation of the system by quickly submitting a large number of proofs

· Encourage stable participation: Incentivize miners to provide stable and continuous ZKP computing power through rewards to enhance the security and reliability of the network

· Ensure system efficiency: Ensure efficiency and fairness, avoid resource waste and network congestion, and improve the performance and stability of the overall system

Merlin Chain will also introduce a fraud proof mechanism in the future to further ensure the integrity and security of the data.

Multi-party cooperation to ensure asset security

Cobo's MPC wallet solution

Currently, all assets in Merlin Chain are managed by Cobo's MPC wallet solution, which uses cold and hot wallet isolation and other measures to ensure that all cross-chain/locked funds in Merlin Chain are non-custodial and safe.

Cobo is a well-known digital asset custody service provider. Its MPC wallet solution uses advanced MPC technology to implement a threshold signature scheme to ensure that private key shards are generated, encrypted and distributed among multiple parties in a secure environment. Each party signs the transaction together without exposing each other's private key shards or forming a complete private key.

When users use Merlin Chain's cross-chain/locking, the Bitcoin layer network funds transferred to the cross-chain bridge will enter the MPC custody address co-managed by Cobo and Merlin Chain for safekeeping. Any transaction requires Cobo and Merlin Chain to jointly execute the Merlin Chain pre-defined security risk control strategy before signing and releasing. Any unilateral risk will not lead to asset leakage.

With Cobo's private key encryption and sharding technology, Merlin Chain achieves institutional-level security, is not affected by the single point of failure of the private key, and protects assets from security attacks and human errors.

Merlin Security Council

Merlin Chain has established the Merlin Security Council in cooperation with several security companies to ensure the security of its ecological projects, including Slowmist, as well as BlockSec, Salus, Secure3, ScaleBit, Revoke.Cash and other well-known security teams. The committee is used to fund research, education and technology development, and encourage more white hats and dApps to join this decentralized organization to escort Merlin's subsequent ecological development and construction, so that users can safely participate in Merlin ecological projects.

Third-party platform supervision

Merlin Chain supports users to jointly supervise its ecological security through a third-party independent platform. In March this year, mistTrack, a security product of the SlowMist team, announced support for searching and tracking Merlin Chain. Users can query the on-chain data of Merlin and its ecological projects, monitor suspicious addresses, and track deliberate behavior through its platform at any time to ensure the financial security of Merlin Chain and provide a safe and transparent on-chain experience.

Decentralization

Merlin Chain uses a distributed Oracle network. Sequence nodes are responsible for collecting and batch processing transactions, generating compressed transaction data, ZK state roots, and proofs. These data are compiled by the Oracle network execution circuit and uploaded to the Taproot of the Bitcoin mainnet, making them publicly accessible to the entire network. The specific mechanism is as follows:

· Adopts a fraud prevention mechanism designed specifically for ZK proofs to provide final confirmation on Bitcoin

· All raw data is stored in the Oracle network, and the corresponding state root is stored in the Bitcoin network

· Users can retrieve all aggregated transactions on Merlin Chain at any time

· Users verify the correctness and validity of data through ZK proofs without exposing the specific data content

By decentralizing power and data, Merlin Chain is able to resist the risks brought by single point failure and centralization. At the same time, the system adopts multi-signature and cold storage technology to ensure the security of pledged assets. All pledge and reward distribution processes are open and transparent, and users can check their pledge status and expected returns at any time.

The design of node staking is as follows:

· Diversified assets: support the staking of $BTC, $MERL and other mainstream BRC 20 assets to enhance flexibility and risk resistance

· Smart contract management: all proxy staking and reward distribution will be automatically executed through smart contracts to ensure the immutability and fairness of the process

· Real-time monitoring: users can view their proxy staking status and income, as well as the performance record of proxy nodes in real time

· Exit mechanism: the system provides a flexible exit mechanism, users can withdraw their assets at any time to ensure the liquidity of funds

Interoperability

EVM compatibility

Merlin Chain achieves compatibility with EVM, allowing smart contracts in the Ethereum ecosystem to be seamlessly deployed and run on Merlin Chain. This compatibility greatly expands the application scope of Merlin Chain, allowing Ethereum developers to easily migrate their DApps and smart contracts to Merlin Chain and achieve interoperability between Bitcoin and EVM ecosystems.

On Merlin Chain, smart contracts can interact and communicate with contracts on other EVM blockchains to achieve cross-chain operations and data transmission. This interoperability allows value and data between different blockchains to be transferred and shared more smoothly, thereby achieving more complex and diverse application scenarios. For example, a contract can trigger an event on Ethereum and then perform the corresponding operation on Merlin Chain to achieve cross-chain application logic and processes.

In addition to compatibility with EVM, Merlin Chain also supports other protocols and standards such as ERC-20, ERC-721, etc. This diverse support makes Merlin Chain a more open and flexible blockchain platform, providing developers with more choices and possibilities. Developers can choose appropriate standards and protocols according to their needs and preferences to build richer and more diverse applications and services.

Merlin Phantom

Recently, Merlin Chain announced the development of Merlin's Phantom, which aims to achieve free, instant, and barrier-free "interchange" of all assets. The goal of this plan is to allow assets to flow freely in various ecosystems such as BTC L1, L2, Ethereum, Solana, etc. without issuing new assets, while keeping liquidity within the original community. This means that an asset will have multiple forms and enjoy multiple liquidity and utility.

With the launch of multiple track ecological projects such as infrastructure, DeFi, games, and social networking, Merlin Chain is expected to usher in an ecological explosion this quarter. Whether it can undertake the huge asset flow of Bitcoin will become the biggest challenge. We expect Merlin Chain to continue to maintain its leading position with its technical strength and ecological attractiveness, and bring more value and innovation to the protocols, assets and users of the Bitcoin ecosystem.