A slang term derived from the word Naked. But for fish people.
Alonzo: You breast believe it. That bitch was straight Merked. You know when a mermaid is like butt naked.
Sumdu: Yo, i ain't never heard that term before, but I am willing to allow it's use solely for the purpose of this joke, as I too am a humorous individual and I know, dat was like dis wet dream I had once.
Alonzo: Ah HAAaa! Speak truth playa, speak truth.
Although other people are offering plausible etymologies for this word, I'm guessing it more likely is a "verbing" of a shortened version of mercenary, or soldier for hire. Just like narcotics officers became narcs, which then became a slang verb for snitching to cops, I think mercenary became merks, then merked became a slang verb for acting like a mercenary, or killing, robbing, etc.