Megaeth To Refund All Pre-Deposit Funds After “Sloppy Execution”

What Happened

Ethereum Layer-2 project MegaETH said it will refund all funds raised through its Pre-Deposit Bridge after operational failures disrupted the launch of its native stablecoin, USDm.

MegaETH will refund all USDm pre-deposits after admitting operational failures during the launch.

The announcement came on Thursday in a post on X, where the team admitted missteps during the rollout.

MegaETH’s USDm Pre-Deposit Launch Stalls After Bridge Outage

MegaETH opened pre-deposits for USDm on Tuesday with an initial $250 million limit. The launch, however, encountered repeated disruptions from the start.

Once the platform came back online, the $250 million threshold was reached within minutes. The team then announced it would raise the deposit cap to $1 billion. That decision quickly complicated matters.

Market Context

During the process of increasing the cap, a multisignature transaction that controls the contract parameters was incorrectly configured.

MegaETH attempted to contain the situation by reducing the cap to $400 million, then later lifting it to $500 million. The project ultimately scrapped plans to expand the limit to $1 billion entirely.

The goal, the team said, is to establish stable liquidity before a wider rollout.

While Ethereum processes about 30 transactions per second, MegaETH claims a theoretical capacity of up to 100,000 TPS, with sub-millisecond latency and fees below $0.01.

Why It Matters

“Execution was sloppy and expectations weren’t aligned with our goal of preloading collateral to guarantee 1:1 USDm conversion at mainnet,” MegaETH wrote.

Details

Key Takeaways:

A misconfigured multisig transaction triggered an early reopening that sent deposits past $400 million.

Refunds are pending a smart-contract audit, with a new USDC-USDm bridge planned before mainnet beta.

A technical problem with a third-party bridge provider rendered the service inaccessible for about an hour, while users waited for deposits to resume.

Instead of requiring three out of four approvals, the transaction was set to require all four signatures.

That error allowed an external party to execute the queued transaction nearly 34 minutes before the bridge was officially meant to reopen.

As a result, deposits resumed earlier than planned and quickly surpassed $400 million.

Following the incident, MegaETH confirmed that it will return all funds to participants. The refund contract is currently under audit, with repayments set to begin shortly after the review is completed.

“Depositor contributions will not be forgotten,” the team said.

Looking ahead, MegaETH plans to reopen its conversion bridge between USDC and USDm ahead of its Frontier mainnet release, which will serve as the network’s beta phase.

MegaETH Pitches 100,000 TPS Layer-2

MegaETH is an Ethereum Layer-2 network designed to improve transaction speed and reduce costs for blockchain applications, positioning itself alongside platforms like Base, Polygon, and Arbitrum.

The project uses a proof-of-stake model with a performance-based system to calculate staking rewards.