# Decentralized Oracle Network

Merlin Chain adopts a distributed oracle network. Sequencer nodes are responsible for collecting and batch processing transactions, generating compressed transaction data, ZK state roots, and proofs. This data is compiled by the oracle network and uploaded to Bitcoin's Taproot, making it publicly accessible across the network. The specific mechanism is as follows:

<figure><img src="/files/3o0hv7d6e7HMOP0MnAg0" alt=""><figcaption><p>Merlin Oracle Mechanism</p></figcaption></figure>

* Implements a fraud-proof mechanism specifically designed for ZK proofs to provide final confirmation on Bitcoin.
* All raw data is stored in the oracle network, with corresponding state roots stored on the Bitcoin network.
* Users can retrieve all aggregated transactions on Merlin Chain at any time.
* Users can verify the correctness and validity of the data through ZK proofs without exposing the specific data content.

By decentralizing power and data, Merlin Chain can resist the risks of single points of failure and centralization. Additionally, the system employs multi-signature and cold storage technologies to ensure the security of staked assets. All staking and reward distribution processes are transparent and open, allowing users to view their staking status and expected returns at any time.

#### Staking Node Design:

* **Diversified Assets**: Supports staking of $BTC, $MERL, and other mainstream BRC-20 assets, enhancing flexibility and risk resistance.
* **Smart Contract Management**: All proxy staking and reward distribution are automatically executed through smart contracts, ensuring immutability and fairness.
* **Real-Time Monitoring**: Users can view their proxy staking status and earnings in real-time, as well as the performance records of proxy nodes.
* **Exit Mechanism**: The system provides a flexible exit mechanism, allowing users to withdraw their assets at any time, ensuring liquidity.


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