Author: Chloe, ChainCatcher

The Layer 2 network MegaETH officially launched its public mainnet yesterday. This project, self-described as an "instant blockchain," has officially entered the practical stage. The project completed a $450 million token sale in October last year, with subscriptions reaching $1.39 billion, 27.8 times oversubscribed, and received backing from heavyweight figures such as Ethereum co-founder Vitalik Buterin and ConsenSys founder Joseph Lubin. However, later that year, the project faced a crisis with a certain crypto KOL's token quota being revoked and issues with project pre-deposit sales spiraling out of control. Nevertheless, the project team ultimately handled these issues quickly and calmed the situation, preventing it from escalating into a larger crisis.

MegaETH aims to process 100,000 transactions per second (TPS) with a block time of less than 1 millisecond. In recent stress tests, it consistently achieved 35,000 TPS. However, Vitalik has previously expressed increasing pessimism about the current Layer 2 landscape, and despite MegaETH's substantial capital support, its ability to break through in the highly competitive L2 market remains to be verified.

What did MegaETH go through before launching?

Despite being viewed as a performance dark horse, MegaETH has also undergone dramatic ups and downs over the past few months. From the frenzy of public fundraising to refunds triggered by technical failures, the journey has not been smooth. In October last year, MegaETH initiated the MEGA token auction, igniting market sentiment. The auction ultimately attracted $1.39 billion in subscription funds, achieving an oversubscription multiple of 27.8 times, making it one of the notable fundraising activities of the year.

However, just ten days after the public fundraising ended, crypto KOL IcoBeast was ruled by the official team to have violated the "no resale intent" rule tied to a one-year lock-up period, after publicly discussing how to hedge his $1 million allocation on the X platform. Chief Strategy Officer Namik Muduroglu promptly canceled his allocation and refunded the principal, stating clearly that MegaETH only welcomes "true believers" who recognize long-term value, leaving no room for speculators.

At the end of November last year, MegaETH sought to inject early liquidity for the upcoming mainnet through the Pre-Deposit Bridge. However, this initiative turned into a chaotic disaster due to a series of technical errors: incorrect contract SaleUUID configuration, serious limitations in the KYC system, and a multi-signature transaction that was not supposed to be executed prematurely by a third party, causing the deposit channel to accidentally open, resulting in funds surging past $500 million. Faced with the uncontrollable situation, the team ultimately announced a full refund, temporarily closed the bridge, and later stated: "The assets were never at risk, but that’s not important. We hold ourselves to a higher standard; there are no excuses for this incident."

After experiencing a series of upheavals by the end of 2025, MegaETH has finally officially welcomed the launch of its mainnet.

MegaETH sets token issuance KPI, abandoning traditional TGE strategy

According to official sources, alongside the mainnet launch, MegaETH has simultaneously launched the ecosystem frontend platform The Rabbithole, offering functions such as application exploration, asset bridging and exchange, and ecosystem event notifications. Additionally, MegaETH has adopted a token issuance strategy that is completely different from traditional projects; the mainnet is now online, but the native token MEGA will not be issued for the time being.

According to the mechanism released by the team, the TGE must meet three strict KPI requirements:

1. Stablecoin circulation threshold: The native stablecoin USDM must maintain an average circulation of $500 million over 30 days, equivalent to approximately $20 million in protocol revenue per year.

2. Ecosystem application deployment standards: At least 10 rigorously vetted MegaMafia incubator projects must be fully deployed and operational.

3. Application revenue verification: At least 3 applications must continuously generate $50,000 in revenue daily for 30 consecutive days, equivalent to reaching $4.5 million in ecosystem revenue monthly. This "build the ecosystem first, issue tokens later" model aims to break the past vicious cycle of "airdrops upon mainnet launch, token unlocks causing price crashes."

MegaETH ties token issuance rights to actual ecosystem value creation, forcing the team to first demonstrate the network's real demand and revenue potential before initiating a token economy, making this a bold experiment against traditional token issuance paradigms.

Review of MegaETH ecosystem projects and financing background

According to the ecological map on RootData, many potential applications have already been born in the MegaETH ecosystem, including:

1. Noise: This project provides an alternative for prediction markets by allowing traders to bet on which topics will remain hot on the internet long-term. The platform combines elements of Google Trends and existing prediction markets to measure the cultural influence of which brands, trends, and narratives endure. In January of this year, Noise completed a $7.1 million financing round led by Paradigm.

2. GTE: This decentralized trading platform is incubated by MegaETH Labs, combining AMM and centralized limit order books, aiming to bring CEX-level performance and liquidity to DeFi. The initial financing was completed in January last year, amounting to $10 million, with investors including Maven11, Wintermute, etc. In June of the same year, GTE further completed a $15 million Series A financing round, led by top crypto venture capital Paradigm.

3. CAP: This project is a yield-bearing stablecoin protocol that has completed three rounds of financing since the end of 2024, raising a total of $11 million. In April last year, the project simultaneously announced two rounds of financing: $8 million in a seed round led jointly by Franklin Templeton and Triton Capital XYZ, with over ten institutions including GSR and Flow Traders participating; and a $1.1 million community round involving MegaETH ecosystem projects collectively, including GTE, echo, Euphoria Finance, etc. Recently, CAP's cUSD has gone live on the Ethereum mainnet, previously hitting a TVL of over $200 million.

4. HelloTrade: This project is positioned as an on-chain derivatives platform with institutional-level security, offering global 24/7 trading of stocks, commodities, and real-world assets, supporting fast trading and leveraged perpetual futures on mobile. The project was co-founded by former BlackRock crypto business heads Wyatt Raich and Kevin Tang and completed a $4.6 million fundraising round, led by Dragonfly, in November last year.

5. Euphoria Finance: This project is a derivatives trading platform that introduces gamification mechanisms into on-chain trading, combining basic principles of price prediction with the efficiency of CLOB market making, creating a fun, social, mobile-first, and gamified trading experience. Euphoria completed a $7.5 million seed round financing in August last year, led by Karatage, with participating institutions including Robot Ventures and Bankless Ventures, supported by angel investors including Synthetix founder Kain Warwick and other notable figures.

6. Rocket: A redistributive marketplace for trading anything from cryptocurrencies, stocks, memes, NFTs to Polymarket odds; any asset that has a price can be traded on the platform. Rocket completed a $1.5 million seed round fundraising last year, led by Electric Capital, with contributions from Amber Group, Bodhi Ventures, and notable KOL Taiki Maeda.

7. Valhalla: This project is positioned as a perpetual contract exchange that utilizes MegaETH's high throughput characteristics to provide users with low-latency, high-efficiency on-chain derivatives trading experiences. Valhalla completed a $1.5 million seed round financing in December 2024, led by Robot Ventures, with participation from multiple institutions including GSR and Kronos Research.

8. Reach: This project is a SocialFi collaboration platform serving Web3 community creators and contributors, operating in the form of a Discord Bot, allowing creators to set promotion tasks, covering interactions such as follows, likes, retweets, and comments on X platform. Participants completing tasks are rewarded in ETH or points, aiming to make content promotion more targeted and measurable. Reach completed a $1 million financing round in December 2023, with a valuation of $3 million, funded by NxGen and Punk DAO, and just three days after the funding completion, the platform's native token REACH was officially launched.

It can be seen that the MegaETH ecosystem has attracted various projects covering DeFi, derivatives, SocialFi, and other diverse sectors before and after the mainnet launch, with some projects receiving endorsements from top institutions such as Paradigm, Dragonfly, and Electric Capital. However, the ecosystem is still in the early construction stage, with most projects not yet issuing tokens and actual user scale and on-chain activity still accumulating.

Market enthusiasm for L2 has diminished significantly, MegaETH needs to show differentiation

Finally, Vitalik’s recent attitude towards the L2 ecosystem has noticeably changed. Despite having invested in MegaETH, he has publicly criticized the Ethereum ecosystem as "fragmented" repeatedly, emphasizing that L2 projects should meet the "first stage" decentralization standards, or else their importance is questionable. This presents a genuine pressure for MegaETH.

According to its official MiCA Whitepaper, MegaETH currently operates using a singular sequencer model, with decentralization of the sequencer and governance aspects listed as progressive goals for the future, rather than a completed status. Analysis from Messari also points out that this architecture introduces additional trust assumptions at the execution level. In other words, the final settlement of MegaETH relies on Ethereum's security endorsement, but the transaction ordering and execution are still dominated by a singular node, failing to achieve true decentralization.

Although the MegaETH mainnet has been launched, ecosystem verification is just beginning. In the future, MegaETH will need to prove itself as an exception to Vitalik's criticism rather than another example of "parasitism" within the ecosystem.

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