Welcome back, everybody. You got Will and I, man here from the block runner metazone, Roe V and M Scrab. And today we got some l two action. Some more l two stuff, dude. Yeah. As promised from yesterday,
the biggest l two thing happening is Merlin's like. Yes, inevitable deployment main net release. Because we've been hearing a lot about Merlin. I mean, Jeff has been basically
completely dominating since he's kind of like entered the scene. Correct. Brc four hundred and twenty s. The bitmap game virtual environment ecosystem that has a lot of traction and then now seemed like out of nowhere just complete like l two God mode. Right. Going from announcement to testnet to mainnet within the same month. Yeah. Pretty unheard of from our perspective. I don't think we've ever seen, no, definitely not. Like an infrastructure layout of this magnitude and at this pace. Yeah. And we're going to
show an example of something that we saw in December that is just now getting rolled out. Right. We'll talk about it at the end. Yeah. So, okay, what is Merlin chain? What is the opportunity of it? Should we care? Should we not? What is it going to do? Let's talk about it. Right? Yeah, Merlin chain. So we got an announcement January 31. So it's a few days old and they're talking about the testnet, the final release coming up. And their, I guess, token allocation mechanism that they have going right now. Correct. Which typically in ethereum land, a lot of the l two s, they leverage airdrops as part of their token generation mechanism. Right. It's
like, hey, we have this new l two zk this, ZK that, whatever it is, optimistic this, optimistic that we're rolling everything up, guys, is what we're doing. So here it is, here's our product, and here's a test net. So get in there, start deploying, start messing with things, interacting. And then we have this arbitrary criteria set that we generated based on that. We're going to distribute a portion of our
tokens to those testers. Right. Those contributors to the network. Right. I don't think that's the case here. Yeah. This is also a token generation event. But I guess the criteria of allocations are a little bit different, right? Not necessarily an airdrop. Yeah. And so the reason why we keep talking about l two s is because we know that l two s is going to be an important part of the bitcoin ecosystem. Because as we saw, I think it was over the weekend, we saw that bitcoin mining prices were at like 500 sats per v byte. Yeah. And that was just over the weekend. That was like a spike.
We had periods where that maintained for weeks. Right. So essentially, like eliminating the majority demographic. Yeah. At 500 v bytes, I think a transaction is on average $20 to $30. Yeah. That's just like a simple transaction and that's still nothing. Right. We saw like hundreds of dollars on Ethereum.
Yeah, correct. During the heat of. What was that? Like? Nft mania. Nft mania. DFI mania. Yeah. So these things are going to happen if we don't, I guess, offload some of that pressure off of the layer one. So we knew this was coming and there's
people here rushing to kind of support that. Uncombering. Yeah. So let's take a look at what the potential opportunity here is for entertainment. Opportunity. Right. So we're looking at here a bunch of l two s that occurred on, I guess, different chains, including obviously Ethereum here. And its current market capitalization is around $20 billion. That's just today. Yeah. And that's in the heat of the. Bear, I would say. Yeah.
At its all time high was probably around 200. Right. Probably like 100 to 200. So this is obviously a monster market segment. Right. We're talking about like entertainment, pool opportunities and such. The l two space is huge. And we
went to Ethereum, Denver. We talked about that experience. It is literally an industry of its own. Right. It is like l two providers. It's quite the competitive space. Right. And everybody's trying to claim their market
share. Just imagine them as like cell phone providers. Right? It's this constant war. How do I get more network share? That's what these guys are doing. Right. Because that's how they make their money is like the more transactions are rolling up, those are more fees for them. And it's a whole business. Right, right. It's an
enterprise. And the biggest business is polygonmatic. Right? Yeah. Because it was like, basically first, I would say first successful. Yeah. It had a tge on binance. It did. And then I guess it started out as
matic. Yeah, it started out as matic. It didn't do a crazy amount of volume at the very beginning. And then all of a sudden it started getting adoption. It turned into polygon. It turned into Polygon and then started getting adoption from all these different a lot projects. Dapps games, including ourself. That's right. Back in those days, we're like, okay, yeah. Because we were debating on whether to use Matic or XDI at the
time. Correct. And then all of a sudden they switched their marketing it went from Maddox to Polygon. And then that's the inflection point here is when they transitioned, basically, they did. A much better job, the best job of building an actual tangible network effect for an l two. Right. And then that kind of triggers, like a cascade event, right, where developers kind of rush in and they contribute and they start building in these environments. Right. So expect something similar to kind of like, manifest on.
So, like, already the horses in the race are positioning. Merlin being a big one, right. It's like, okay, we're rushing this tech. It's here, it's already usable. People are building with it now. And let's get this
token out, let's distribute it, and let's do this tGe. Right, right. So what's the opportunity in that? So Merlin, on people's launch pad, it looks like 1% of Merle for $1,000 total. So 1% of their allocation is being used in this launch pad. And that
represents, like, a total fully diluted value at $100,000, right? Yeah. So they're setting a price, right? Yeah, they've set a price 100k market. Cap, which most idos typically do. Right. But in most idos cases, this isn't really like an ido.
Ido. Typically they receive funds, a very small allocation. Like, oh, okay, our goal is like, whatever, yeah. In exchange for that allocation, now you're securing spots or potential lottery spots for this tge that is preset at a very low market valuation. It's designed this way. Correct, for many reasons. From my perspective, it's like the main
leveraging of this is to kind of generate market entry hype. Right. It's like, okay, this new token has entered into the ecosystem and it's done 100 x 200 x. Like, out the window, out the gate, because it's designed to do 100, 200 x, because they know this thing is going to spot trade in probably the tens or hundreds of millions of dollars as soon as it enters the market because there's so much anticipation for it. They could have set the market cap at $1,000 and they do 1000 x right out the gate.
Yeah. To inspire FOMo. Right, right. And it's a very well understood tactic in the web three space. And it works. It works. It does work. It's akin to like when
we were talking about bitmap during its mint phase, right. Its blockout phase. Pre blockout, each bitmap was about a dollar and. But that was completely organic. It was completely organic. But the whole point is that you got in at a dollar 50. And if you're able to kind of snag, like, a portion of this, you're getting at floor. I mean, bottom prices. Right.
Literally, the micro is to floor valuation. So, yeah, you're pretty lucky. Well, in this case, there's no luck involved. I think you just need to. There's some criteria here, step by step. So there's other youtubers out there that have done the full due diligence. We recommend you find them. Francis is out there. I think he did, like a full
breakdown, step by step. How do you participate and get your allocation? But from our perspective, if we go to the next tweet, the next ones, I mean, look at this. This thing is already so oversubscribed as far as participation.
Yeah. 100,000 people have already interacted with. So this started yesterday. So within a 24 hours time frame already, that 1% allocation up for garage is so diluted. Yeah. So I think we should talk about what we expect in terms of the marketing as a result of this. Right? Yeah. Because it's important, because
Merlin is kind of setting a precedent here. Right. Whatever the outcome of all this ends up being, it's going to be replicated 100 fold through all the next l two s that entered the space, most likely. Yeah. So basically, it's like, once this is all said and done, the market cap does 100 x, like you were saying. Which would be what? And it creates more fomo. 10 million. Correct. Yeah. Okay. There's your 100 x 10 million market. Cap, and then people who didn't get into this, they see, oh, 10 million market cap. That's a good deal. I'm going to go in all
of a sudden goes to, like, 50 million, 100 million. Correct. Right. And then that's how all this works. Yeah. I don't think the opportunity really is. I mean, I think participating in this, like, tge is always cool, it's always good. There's opportunity in that. But from what we've seen from l two deployments in the past, the big opportunities also come from participating in the Dapps that are building in those ecosystems. Right. Yeah. Remember when Polygon
hit and quickswap did a legitimate thousand x? Yeah. Like, if you were there. Yeah. We were looking at it when it was like a dollar and then in the mania went to $1,000. Yeah. Because it was the native Dex for Polygon. For Polygon. Yeah. You had to bridge over your ethereum. And we needed it. Right. It was like, we have all these l two assets. How do I swap them? It's like, well, here we are. Quick swap. Yeah. So that's a very well understood necessary primitive for an l two.
So of course Merlin comes out the gate with a swapping protocol already ready to go. Yeah. At the end. Definitely. Listen to Jeffrey on Orna's revolution recent podcast. They talk about how Merlin swap, I think is like an independent development team bringing this. Interesting. Yeah, yeah. So these devs know, right? Like the devs know. Yeah, they know for sure. They probably experienced devs. They've seen this
happen 100 times on Ethereum. It's like, yeah. The opportunity is let's deploy the first decks. There's going to be liquidity in this environment. Let's service it. Yeah. All right. Moving on to Mobox. Same thing with Gamefi. And this is another very veteransque sector. Yeah. I feel like Gamefi and games on
chain is probably the best utilization of l two s. It's the perfect demographic for a use case here. Yeah. It's literally almost unfeasible to architect a game on l one. We've tried that quickly. There isn't a
demographic in the world that's willing to participate in that kind of game experience. Right. Because game, even though they're web three games and there's financial components to that experience, it still has to mirror our web two existence. Almost fearless and frictionless gameplay. It has to be as closely aligned to that. And that's what l two s
provide, basically. Or like super scalable l ones, like Salana. Right. Yeah. All right. Bitcoin is obviously not that. Yeah. So another game, bitmap war. This is one that runs on Bitmap, which is cool. Yes. A metaverse game, like you said.
And l two again, is going to be a vital piece to making this thing run. Correct. So again, so in our opinion, this is the opportunity and there will be more dapps that kind of like seep into this ecosystem. And once they see, oh, damn, there is a lot of liquidity, that, that is like the beacon for developers. Right. Liquidity. Wherever liquidity exists, developers, they come in. And that's Maryland's goal. Right. Is to onboard as much liquidity as possible. Sure.
Yeah. And we even have Charles Hoskinson chiming in on the whole l two race on bitcoin. Yeah. If you don't know who that is. Yeah. He's the founder and
evangelist of Cardano. Correct. Evangelist, cult leader. Some would mean he's literally been out there in the deep seas like searching for aliens over the last year or so. But he's coming. Does. Right, as one does. But he's coming back and he's seeing like, damn, there's some weird shit happening on bitcoin. It's like, oh, you guys are like, fucking connecting all these l two s to it.
That's new. So he's chiming in with his opinion. Right? What do you think? Yeah. So I want to kind of read through, because Charles and Muneeb have a dialogue on Twitter. And ultimately, the foundation of the conversation boils down to this. It's like onboarding and offboarding from this ecosystem. Typically, whenever you connect an l two to something like bitcoin, you have to send bitcoin to this multisig wallet, and then you can program what happens with that multisig based off of some logic. Right. That's connected to that multisig. Okay. Right. So the issue with that is
that it's a multi sig. That means somebody else controls the value in that multi sig, so you have to trust them. Right. And so in the dialogue here, there was like, well, there's this trust issue that you have to rely on. And Muneeb's like, well, not really. Right. Because
in this thing called the BiTVM, we sort of solved that. And so that's what the discussion is about. So I recommend you guys read it. It's pretty interesting. That's a good back and forth between these guys. Know what the fuck they're talking about. For reals. And Moon Eve, obviously, he's been pioneering and working on this l two expansion to bitcoin for years. Right. So
he's an authority when it comes to this discussion. Right. And. Yeah. The fact that BITVM continually becomes part of this narrative. Right. What is the actual ideal
mechanism for layer two that is closely aligned to bitcoin's actual ethos. Right. Of like. Yeah. Trustlessness. Right? That's. Right. Because as we've seen on Ethereum, there's a large new trust component to these ecosystems. Right. These sequencers. Like, you have to trust that they're not going to. Yeah. And you have to give up the trust. Right. So you have to trust them, but in return, you get a better experience. Yeah. Correct. So that is a little bit of what's happening
as far as Merlin. That is like the deployment of that. Right. Because there is a custodial component to that. Right. You're sending your bitcoin to. Not this. There's like a bridging of assets to a new
environment that just requires some new layer of trust. Right. This isn't like some sort of smart contract that is facilitating these transactions natively on the first layer. Correct. Right. Because you can't do that in its current form. Like, the infrastructure doesn't exist to enable that. Right. So these ideas, as far as bringing BitVM into, as part of the technical infrastructure of this, it's still, like, in its theoretical stage. Right.
So if we were to kind of wait around for this to happen, we'd be waiting for another six months, possibly. Yeah. Right. So what do you think? Well, now with Citria, they're actually implementing. Oh, so maybe we don't have to wait six months. Right. So Citria announcement today is great news for bitcoin. L two s,
BitVM based bridges and roll ups are happening one way or another. We're already looking at how BitVM can upgrade SBTC for stacks. Shit. Yeah. So this is SBTC. They have, like, a deployment window in a couple of months. Yeah. April.
So if they're. They're going to implement this as part of SBTC. I wonder if this is going to factor into maybe a potential delay. I don't know, because this is new stuff. It is hopefully not. That would be monumental. As far as sadness, if stacks had delay, like another three or four months or something. I don't think so. I think they can
still reach that update in April and then probably implement BitVM on top of that. Yeah. But nonetheless. So, Citria, definitely. So Bob bodily came out with, like, a banger explanation as he. Yeah, yeah. So, Citria, bitcoin's first zk roll up, everything you need to know. So he has the longest
TlDr that we've ever seen, but we definitely recommend that you guys read this. But ultimately, Citria is legit and you should be paying attention to it. Right? Yeah. So the fact that there are, like, l two s coming out of stealth mode that have been building for months or potentially, like, an entire year, as this team is claiming, these conceptual ideas that were introduced, I guess, theoretically are pretty close to, like, an application stage right now. It's not going to happen overnight. I still think this is going to be like a three to six month actual rollout.
Right. If you're actually legitimately using this technology now, there's going to be probably a bunch of l two s claiming in their marketing, it's like, yeah, we're beat vm compatible. Right? Yeah, this is bit vm, guys. We've been working on that. Right. So this might be like, a new narrative spin to it, like the next generation of l two s. Who knows? Yeah. So what is Bitvm? It's compute.
Anything on bitcoin by this guy named Robin Linus. So this was released December twelveth, 2023. So it was two months old. Yeah, we talked about it briefly, because again, this is like a theoretical proposal. It kind of reminds you, like, what UNICEF proposed with fractal, bitcoin. It's like these theoretical papers, like, this is a good idea, and then it's like you put it out there and you wait to see will the developers actually, like, I feel like, yeah, they. Put it out there, but I think
they're also developing it themselves. They're just like, sure, they're putting out the theories. Like, this could work, and clearly we're working on, uh. But anybody can implement this. Well, it reminds
me, whenever optimistic roll ups were first, I remember, like, they're putting out papers just like, yeah, Vitalik was endorsing him. He's like, yeah, this is a good idea. You guys out there who are developing an ecosystem should probably focus on this. And then before you know it, we have optimism and everything else. That took several years, though, from paper to optimism. That took several years. I would say, like a year, year and a half,
maybe. Yeah, it took a while. That's what I mean by. So ethereum had to truly innovate in this space because ethereum needed it. Scaling the layer one environment is much more difficult. I think ethereum still has, like a ten year roadmap for that to happen. Like, actual sharding and such to factor in.
Bitcoin has absolutely no roadmap or any consideration for, like, yeah. How are we actually going to scale this main chain? That is not part of the ethos. The design, and it probably doesn't need to do that. And I think it's safe to assume it never will. Right, correct. There's been plenty of attempts to try and brute force that I guess, and that always results in, like, a fork and nothing really, I guess this doesn't. Go without saying, is that we've seen l two s exist on
ethereum and all these other l ones, right? So it is not too much of a stretch that we're going to see 50 to 100 times that level of activity on bitcoin, because all they're doing is doing copy and paste. Right? Editing some stuff. All of a sudden we're also doing. L two s. Correct? Yeah, correct. We're past the innovation stage. The new innovation stage is like, how do we incorporate BiTVM into all of this? Yeah, that. And how do we take what's existing,
like the innovation that exists. How do we take that and implement it on bitcoin? You have to innovate there. There's some finugling there for sure, but nonetheless, the market is impatient. So therefore, there is, like, a demand for we need today solutions. Okay. We understand that tomorrow solutions are probably technically
better, more safeguarded. Yeah, better. But it's okay. Whenever we get to that point, then, yeah. Okay. You guys can pitch us these narratives and these new technical infrastructure components, but in front of the now, it's like, give us an l two environment where we could deploy apps and generate new liquidity mechanisms because the market has proven like that is really the driving force. Agreed. It's
liquidity. Right. Where is that? I want to look for that. So Merlin has a big shot at really attracting a lot of that activity because it's quick. Jeff is fast. He's very fast at delivering. Now, there's
probably some tradeoffs to that. There might be a lot of risk, I would imagine, by going so quick. I would think that results in not enough testing. Yeah. Be careful with interacting with dapps and all that stuff. I mean, you have to do your own due diligence and make sure that you are comfortable with whatever happens when you interact with these applications. Yeah, there needs to be a PSA, for sure. It's like, yeah, there's going to be a lot
of opportunity in l two, but there's also a lot of risk. And welcome to crypto. That's what it is. Yeah, it is what it is. No risk, no reward, right? Yeah. Finally, we're looking at Ordinals
Revolutions podcast with Jeff from Bitmap Tech. And definitely take a read or actually just watch it. But ordinals revolution is kind of like the place to go if you want to keep up to date with as much as ordinal's stuff that is happening, because it's hard for us to keep up with everything. So sometimes it's just easy to see what's happening just on a YouTube video. Yeah, we're entering into, like, a consolidation mode, I think, as far as the content we output, because we've found our focus. Right. It is very much in this non
arbitrary DMT realm, which encompasses bitmaps, things like rare sats, things like non arbitrary tokens. What's going to manifest out of that? So, yeah, a lot of our content is going to, like, we found our nexus of things that interest us, but there's a lot of shit happening beyond that scope. Right. So, yeah, definitely we recommend that. And one day we'll get Jeff back on here to really hash it out. Yeah, we did an interview with him a while ago, so definitely check that out, too. All right, well, that's it for us. I appreciate you guys for watching. If we missed anything, let us know in the comments section below. And that's it. Thank you guys for watching. We'll catch you in the next
video. Peace.
2024-02-14