According to PANews, Merlin Chain has been evolving from a Bitcoin sidechain to a Bitcoin ZK Layer2 solution. This transition has been marked by a series of strategic integrations and iterations, driven by the need to address fundamental programmability issues within the native Bitcoin network, such as data availability (DA) and Turing-complete smart contracts (SC). The Bitcoin ecosystem has seen numerous innovative projects over the past year, but many have yet to fully deliver on their promises. 
Merlin Chain aims to enhance its technical framework by incorporating elements from various projects like RGB++ (Nervos), BitVM (BitLayer), zkVM (ZKM), AVM (Atomicals Protocol), and DA (B² Network, Nubit). Initially, Merlin Chain was a pure sidechain architecture built by Lumoz using Polygon's CDK RaaS service, functioning as a Validium chain. This meant that transaction data was stored off-chain, with only validity proofs published to the L1, which could not verify the accuracy of L2 data. The original data was stored in a local database, managed by a Data Availability Committee (DAC) responsible for data retrieval, sorting, and verification. This reliance on the chain's inherent 'trust' made large-scale expansion challenging. In the Ethereum Layer2 ecosystem, Validium was replaced by Rollup for similar reasons. To address these fundamental shortcomings, Merlin Chain has undertaken two key enhancements: First, it partnered with BTCOS to improve the native cross-chain bridge and the verifiability of L2 data on the Bitcoin mainnet. 
BitcoinOS developed a verifiable Proof virtual machine called BitSNARK, which, combined with the Grail Bridge, updates L2 asset transfers and state changes. This process uses a ZK intermediary network to synchronize states between L2 and the mainnet, achieving trusted interaction through mainnet asset time locks and the BitVM challenge mechanism. Second, Merlin Chain collaborated with Nubit to build verifiable data availability (DA) capabilities. This involves deploying full nodes off-chain to synchronize BTC state data and change state data proofs, with light nodes on the BTC mainnet for state verification and finality confirmation. This approach addresses the transparency and verifiability issues of off-chain DAS, enhancing the required DA capabilities (currently under development). 
Ultimately, Merlin Chain aims to become a Bitcoin ZK-Rollup network, composed of nodes, zkProvers, and databases. By leveraging a decentralized oracle network similar to the Ordinals protocol index, it seeks to achieve balanced improvements in decentralization (permissionless node distribution), transparency (public data accessibility), and verifiability (mainnet verifiable L2 data state with challenger mechanisms), making it an EVM-compatible Bitcoin Layer2 solution.