MegaETH Acknowledges ‘Mistakes Made’ and Commits to Refund Pre-Launch Funds
MegaETH reassures users of their contributions as they outline new compliance measures for refunds after mismanagement during a recent fundraising.
MegaETH has announced its commitment to return all funds from its Pre-Deposit Bridge after acknowledging mismanagement during a pre-launch fundraising effort. This Ethereum Layer 2 scaling solution reversed plans to preload collateral for USDm, its native stablecoin.
The project admitted that the execution was ‘sloppy’ and that expectations for an initial cap of $250 million did not align with their actual goals for 1:1 USDm conversion at launch.
MegaETH Halts Pre-Deposit Operations
Moving forward, the refund process will be managed by a newly developed smart contract that is currently undergoing an audit. Reimbursements will commence post-review. MegaETH has indicated that several technical failures contributed to the chaotic pre-deposit phase, including issues with transaction failures and complications from their KYC provider, Sonar, which blocked significant user traffic.
As services resumed, deposits opened unexpectedly early, resulting in the $250 million cap being reached in mere minutes, leaving many users unprepared as they awaited formal communications. A bid to increase the cap to $1 billion was foiled by premature execution, resulting in contributions surpassing $400 million due to a misconfigured transaction.
Efforts to restore a cap of $400 million and later $500 million failed, leading MegaETH to suspend the process completely. They emphasized that all contributions will be honored and that future communications will comply with new standards. The project reassured stakeholders that USDm will remain central within its ecosystem and plans to reactivate the USDC-USDm conversion bridge prior to the launch of its Frontier mainnet to enhance liquidity and support user onboarding.
Previous Issues Resurfaced
A comparable incident occurred last month with Stable’s pre-deposit rollout, which provides a context for MegaETH’s current situation. During Stable’s pre-deposit phase, significant deposits were noted from a small group of large wallets prior to the official launch, resulting in the initial cap of $825 million being achieved in approximately 22 minutes. This triggered accusations of front-running and alleged insider trading as smaller investors were crowded out.
