MegaETH’s $500M Pre-Deposit Turns Into a Full Rewind After Missteps Pile Up
The issues began immediately at launch, when transactions failed because the contract contained an incorrect SaleUUID, requiring a 4-of-6 multisig update.
What to know:
MegaETH will return all user funds from its pre-launch Pre-Deposit Bridge due to a chaotic and disorganized fundraising attempt.
The team cited technical failures and operational missteps, including an incorrect SaleUUID and strict KYC rate limits, as reasons for the disorderly process.
MegaETH plans to reopen the USDm and USDC to USDM conversion bridge with improved controls before the Frontier mainnet launch.
MegaETH will return all user funds deposited into its pre-launch “Pre-Deposit Bridge,” reversing a campaign that was meant to preload liquidity for USDm — the stablecoin that will anchor the network’s Frontier mainnet — but instead devolved into one of the most disorderly raise attempts of the year.
The team said the execution “was sloppy” and that user expectations around a $250 million cap were not aligned with its internal goal of pre-seeding collateral to ensure 1:1 conversion at mainnet.
All deposits will be refunded through a new smart contract that is currently under audit.
While MegaETH emphasized that no funds were ever at risk, the decision follows a blow-by-blow breakdown shared by the team detailing how a series of small technical failures — compounded by operational missteps and misconfigured infrastructure — produced a chaotic, unfair sale process.
The issues began immediately at launch, when transactions failed due to the contract containing an incorrect SaleUUID, necessitating a 4-of-6 multisig update.
At the same time, Sonar, the KYC provider handling identity checks for deposits, applied an unexpectedly strict rate limit that blocked large portions of user traffic. It took the team more than twenty minutes to identify and fix the issue.
Once the system resumed, deposits opened at a randomized time. Users who were refreshing the page managed to fill the entire $250 million cap within minutes, while those relying on official communications were effectively locked out.
A decision was then made to raise the cap to $1 billion — but the transaction to lift the cap was executed roughly 30 minutes early by an external party.
Because Safe multisig transactions become executable by anyone once the required signatures are met, the team lost control of the scheduled timing.
Attempts to contain the inflow by lowering the cap to $400 million failed as inflows outpaced transaction confirmation. A second attempt at $500 million failed, but by then, the team had suspended the planned expansion to $1 billion and halted the entire process, citing unresolved bugs in the KYC flow.
MegaETH stated that depositors will be recognized later, although it stopped short of specifying the details. As such, the USDm and the USDC to USDM conversion bridge will reopen ahead of the Frontier mainnet to build liquidity under a more controlled setup.
The incident adds new pressure on MegaETH to prove the rest of its roadmap is production-ready.