MegaETH is an Ethereum Layer 2 (L2) blockchain designed to achieve high transaction speeds and low latency. It was built to leverage extreme node specialization, eliminating block gas limits and unlocking continuous compute for developers. MegaETH also features a native stablecoin, USDm, designed to subsidize network operational costs and provide stable, low transaction fees ^[11]. ^{[1] [2]}.

Overview

MegaETH is a high-performance Ethereum Layer 2 solution, focusing on achieving fast transaction processing speeds and lower block times than many existing blockchains ^[3].

The project was first conceptualized in 2022 by Yilong Li, with development commencing in mid-2024 following initial fundraising ^[3]. The core objective was to create a "real-time blockchain" capable of supporting decentralized applications (DApps) that require high throughput and responsiveness, such as those in DeFi, GameFi, and SocialFi ^[4]. A key part of its economic design is the native stablecoin, USDm, whose reserve yield is used to subsidize the sequencer's operating costs, aiming to replace traditional fee markups ^[11].

The project aims for transaction processing speeds exceeding 100,000 transactions per second (TPS) and block times under 10 milliseconds. Its public testnet demonstrated block times of 10 milliseconds and processed over 20,000 TPS ^{[11] [3] [1]}. This performance target involves design decisions that differ from some other L2s, particularly concerning decentralization of certain components like the sequencer ^[5].

History

MegaETH was conceptualized in 2022 by computer scientist Yilong Li ^[3]. Li's idea was influenced by discussions around blockchain scaling, particularly a 2021 essay by Vitalik Buterin on centralized block production and a 2022 article on data availability layers ^[5]. He co-founded the project with Lei Yang, who had previously contributed to the foundational research for EigenLayer. Development began in mid-2024 following a successful $20 million seed funding round on June 27, 2024, which included investors like Dragonfly Capital, Vitalik Buterin, and Santiago R. Santos ^{[3] [5]}. The project raised an additional $10 million on December 13, 2024, through a sale on Cobie's Echo platform ^{[3] [11]}.

Throughout 2024, the project engaged its community with events like the World Computer Day at Bangkok Devcon on November 20 ^[6]. In early 2025, MegaETH raised further capital through a flagship NFT collection. The "The Fluffe" soulbound NFT collection was announced on February 5, 2025, with the first minting phase taking place on February 12-13, raising $30 million ^{[3] [5]}. The project's public testnet went live in March 2025, and on March 26, Bitget Wallet announced native support, allowing users to interact with the high-speed test environment ^{[12] [4]}. Other initiatives included opening applications for the MegaMafia 2.0 accelerator program on April 23, 2025 ^[7].

A key strategic development occurred on September 8, 2025, when MegaETH announced its native stablecoin, USDm, in partnership with Ethena Labs. The stablecoin was designed to use yield from its reserves to subsidize network operational costs ^{[11] [12]}. On November 20, 2025, the team announced a pre-deposit window for USDm would open on November 25 with an initial cap of $250 million ^[13]. The launch event on November 25 was plagued by technical difficulties. An outage with a third-party bridge provider and KYC system failures delayed the opening for up to an hour. Once deposits began, the $250 million cap was filled in minutes. A critical multisig configuration error (a 4-of-4 instead of a planned 3-of-4) then allowed a community member to prematurely execute a transaction to raise the deposit cap. This resulted in an uncontrolled surge of deposits that surpassed $400 million. The team halted the process after the cap reached $500 million, canceling a planned expansion to $1 billion and offering withdrawals to all participants while publishing a post-mortem of the incident ^{[14] [15]}.

Technology and Performance

MegaETH is designed as an EVM-compatible Layer 2 network, allowing existing Ethereum applications to potentially port over ^[5]. Its primary focus is on achieving high-performance metrics.

Key technical aspects and performance targets include:

• Transaction Processing Speed (TPS): Aims for over 100,000 TPS. The public testnet has demonstrated over 20,000 TPS, while private testing reportedly achieved 15,000 TPS ^{[11] [5]}.
• Block Times: Targets sub-10 millisecond block times, with a goal of reaching 1 millisecond for "real-time" performance. The public testnet has shown 10-millisecond block times ^{[3] [1] [11]}.
• Gas Capacity: Aims for over 10 gigagas per second ^[1]. Private testing showed usage of 1.5 gigagas, with plans that were set to double this with a proprietary parallelization engine ^[5].
• Sequencer: Utilizes a single, centralized sequencer to minimize latency and maximize throughput ^[5]. The sequencer posts collateral that can be slashed if it acts maliciously, and a backup sequencer is planned ^[5].
• Data Availability (DA): Outsourced to EigenDA, which is backed by EigenLayer restaking ^[5]. This allows for higher bandwidth compared to posting data directly to Ethereum blobs ^[5].
• Network Structure: Includes a network of full nodes that update their states based on the sequencer, a network of provers for validity checks, and replica nodes that receive state differences (diffs) to update their states with lower hardware requirements ^[8].

Funding and Investors

​MegaETH has conducted multiple fundraising rounds to support its development.

• Seed Round: Raised $20 million on June 27, 2024 ^[3]. Notable investors included Dragonfly Capital, Vitalik Buterin, and angel investor Santiago R. Santos ^{[3] [5]}. Other participants included Figment Capital and Robot Ventures ^[5]. ABCDE Capital is also listed as an investor ^{[9] [10]}.
• Additional Funding: Raised another $10 million on December 13, 2024, through Cobie's Echo platform ^{[3] [5]}.

The Fluffe NFT Collection

On February 5, 2025, the MegaETH team announced "The Fluffe," a flagship soulbound (non-tradeable after minting) NFT collection ^[3]. The collection consists of 10,000 humanoid rabbit NFTs ^[3].

• Purpose: The NFT collection was launched as a method for public fundraising and to give the community "meaningful skin in the game" ^[3]. The team stated it aimed to avoid issues associated with points programs and attract users demonstrating "conviction and commitment" ^[3].
• Mint Details: The mint was whitelist-only ^[3]. Each NFT cost 1 ETH to mint ^[3]. The mint occurred in two phases.
  • Phase 1: Started on February 12, 2025, lasting two days ^[3].
    • Day 1 (Feb 12): 5,000 NFTs available for a small number of wallets, including a guaranteed whitelist for dedicated supporters and partners (1,500 NFTs minted for free) ^[3].
    • Day 2 (Feb 13): 3,500 NFTs available for a larger pool of whitelist participants ^[3]. 5,000 registered wallet addresses were randomly selected for this first-come, first-served opportunity ^[3].
  • Phase 2: Was planned for an unconfirmed date "a few months after the first phase" ^[3].
• Token Allocation: The team plans to airdrop at least 5% of MegaETH's token supply to NFT holders ^[3]. Token allocation is intended to increase as users "evolve" their NFTs ^[3].
• Design Features: Each Fluffe NFT has a unique appearance and belongs to one of 16 cabals ^[3]. Features include customizable cosmetics, a 2D profile picture, and an "evolving" option ^[3].

USDm Stablecoin

On September 8, 2025, MegaETH announced its native stablecoin, USDm, created in partnership with Ethena Labs ^{[11] [12]}. The stablecoin, also referred to as MegaUSD, is designed as a core component of the network's economic model to power real-time applications and ensure low transaction fees ^[12].

Economic Model and Purpose

The primary purpose of USDm is to subsidize the operating expenses (OPEX) of MegaETH's sequencer. Instead of marking up transaction fees for profit, the network uses the yield generated from USDm's underlying reserves to cover these costs. This model is intended to provide users and developers with consistently low, sub-cent transaction fees and align incentives between the network and its participants ^[11]. The team noted that this approach was chosen as a compliant way to use reserve yield for the community's benefit, as opposed to direct yield distribution to holders ^[11].

Technical Infrastructure

USDm is built using Ethena's "Stablecoin-as-a-Service" infrastructure. The initial version of USDm is issued on Ethena's USDtb rails, meaning it is directly backed by Ethena's USDtb stablecoin ^[12].

The reserves backing USDm (via USDtb) are primarily held in BlackRock’s tokenized U.S. Treasury fund, BUIDL, which is managed on the Securitize platform, and also include liquid stablecoins to facilitate redemptions ^{[11] [12]}.

Pre-Deposit Launch Incident

On November 25, 2025, MegaETH launched a pre-deposit window for USDm, allowing KYC-verified users from a prior token sale to deposit USDC ^[13]. The launch, which had an initial cap of $250 million, was marked by significant operational issues ^[15].

Events on launch day included:

• An immediate outage of the third-party bridge provider and failures in the KYC system, which delayed the start of deposits for about 30-60 minutes ^{[14] [15]}.
• Once resolved, the $250 million cap was filled in under three minutes ^[14].
• A critical multisig configuration error (a 4-of-4 instead of a planned 3-of-4) allowed a community member to execute a pre-signed transaction to raise the deposit cap approximately 30 minutes ahead of schedule ^{[14] [15]}.
• This led to an uncontrolled surge in deposits, which surpassed $400 million as the team worked to regain control ^[15].

The MegaETH team ultimately halted deposits after the total reached 1 billion that day. They offered withdrawals to all participants and published a post-mortem explaining the technical failures. Despite the chaotic rollout, the underlying smart contracts were reported to be secure ^{[14] [15]}.

MegaETH Pre-Deposit Bridge Refund

On November 27, 2025, MegaETH announced that it would return all funds from its Pre-Deposit Bridge. In a public statement, the team cited a "sloppy execution" and a misalignment between community expectations and the project's goal of pre-loading collateral for the USDm stablecoin. The team stated that refunds would be processed after the completion of a new smart contract audit. They also reaffirmed that USDm remains a core component of the MegaETH economy and that the USDC to USDm conversion bridge is planned to be re-opened before the mainnet launch ^[16].

Ecosystem and Use Cases

MegaETH is EVM-compatible, allowing existing DApps to potentially migrate ^[5]. The project aims to foster the development of new applications that leverage its high speed and throughput capabilities ^[5].

• MegaMafia: An accelerator program for early-stage founders building applications on MegaETH. Participants co-build alongside the core team, advisors, and alumni during month-long offsites. Applications for MegaMafia 2.0 opened on April 23, 2025, with rolling admissions accepted through June 1, 2025, and finalists interviewed in New York in mid-June ^[7].
• Potential Applications: The high performance is intended to unlock use cases not currently feasible on slower blockchains ^[5]. Examples include high-frequency trading, institutional DeFi, and interactive gaming or streaming platforms ^[5]. Projects mentioned in the MegaMafia context include decentralized exchanges (GTE, Valhalla), gamified trading (Euphoria), live streaming with betting (Sweep), and a 3D world engine (AWE) ^{[5] [7]}.

Partnerships

MegaETH has established partnerships to expand its reach and ecosystem.

• Bitget Wallet: On March 26, 2025, Bitget Wallet announced native integration of the MegaETH testnet. This allows Bitget Wallet users to access the MegaETH testnet, claim test tokens, interact with DApps, and provide liquidity directly within the wallet. This integration enables users to explore MegaETH's growing ecosystem ahead of incentive campaigns from both teams ^[4].
• Ethena Labs: In September 2025, MegaETH announced a partnership with Ethena Labs to create and issue its native stablecoin, USDm. The stablecoin is built on Ethena's "Stablecoin-as-a-Service" infrastructure, utilizing its USDtb rails and reserve management system ^{[11] [12]}.

Team

• Yilong Li - Founder
• Namik Muduroglu - Chief Strategy Officer (CSO) ^[11]
• Shuyao Kong - Co-founder ^[12]
• Lei Yang