MerlinSwapMicro-cap

MerlinSwap receives a C risk grade (43/100) from Hindenrank, where lower scores indicate lower risk. Elevated risk — the leading DEX on a declining Bitcoin L2 ecosystem with critical bridge dependency and a concerning TVL trajectory from $100M+ to $15M. MerlinSwap is the primary DEX on Merlin Chain, a Bitcoin Layer 2 network, using a custom DL-AMM (Discretized Liquidity AMM) for concentrated liquidity trading. Once boasting over $100M in TVL, it has declined to ~$15M as the Merlin Chain ecosystem lost momentum. The C+ risk grade reflects its bridge dependency risk, declining TVL trend, and limited documentation for its custom AMM design.

The key risks identified for MerlinSwap are: (1) All assets on MerlinSwap depend on the Merlin Chain bridge from Bitcoin — if this bridge is hacked, wrapped BTC and other tokens could lose their backing entirely (2) TVL has dropped from over $100 million to around $15 million, which suggests declining user interest and ecosystem momentum that could continue (3) The custom DL-AMM design has less battle-testing than standard DEX implementations like Uniswap, meaning there could be undiscovered vulnerabilities in the trading mechanics

MerlinSwap scores 43/100 across eight risk dimensions: Mechanism Novelty: 3/15, Interaction Severity: 4/20, Oracle Surface: 2/10, Documentation Gaps: 6/10, Track Record: 13/15, Scale Exposure: 3/10, Regulatory Risk: 4/10, Vitality Risk: 8/10. The highest risk area is Track Record at 13/15.

Among 111 rated DEX protocols on Hindenrank, MerlinSwap ranks #95 by safety (lowest risk score = safest). Its 43/100 risk score and C grade place it among the riskier DEX protocols.

MerlinSwap scores 13/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.