MegaETH Cancels $1 Billion Fundraising After Technical Glitches
Technical errors during MegaETH's initial fundraising phase led to the cancellation of its planned $1 billion project. The team faced issues with its deposit system during the pre-sale event.
MegaETH’s pre-deposit event faltered on Tuesday due to multiple technical issues that hindered the expected rollout for verified users.
In a post on X, the team mentioned that configuration problems and rate-limit complications caused their Know Your Customer (KYC) system to malfunction. This pre-deposit period was designed for approved users to secure MEGA token allocations.
Additionally, a fully signed Safe multisig transaction—intended for a future cap raise—was executed too soon, allowing unexpected funds to come in. Consequently, the total raised exceeded their original $250 million target.
“The $250M cap was overshot by individuals refreshing the Pre-Deposit Website to catch the random opening time,” the protocol remarked.
Ultimately, MegaETH had to cease deposits at $500 million and abandon efforts to increase the funding goal to $1 billion. A retroactive review and an option for withdrawals will be made available soon.
“While funds were never at risk, we hold ourselves to higher standards and there are no excuses for this situation,” the team responded.
MegaETH is an Ethereum layer-2 protocol that aims to provide extraordinarily low-latency block processing akin to a real-time Web2 application.
Some community members applauded MegaETH for its transparency in addressing the mishaps, while others criticized the project. AzFlin, a developer and DAO founder, asserted that the errors could have been avoided with careful engineering.
MegaETH’s Auction Overview
The pre-deposit phase followed the open auction for MegaETH’s MEGA tokens, which started on October 27 and was fully subscribed within minutes. This auction made available 5% of a total supply of 10 billion tokens, with bids varying from $2,650 to $186,282, inclusive of a one-year lock-up that offered a discount.
Closing on October 30, the auction secured over $1.3 billion in commitments, marking one of the year’s most oversubscribed events.
Due to the overwhelming demand, MegaETH announced it would employ a “special allocation mechanism” to distribute tokens to participants proportionally.
MegaETH is developed by MegaLabs, backed by prominent industry figures like Ethereum co-founders Vitalik Buterin and Joe Lubin. Following its testnet debut in March, the project now aims for 100,000 transactions per second with under-millisecond latency. The MEGA token is slated for release in early 2026.
