The MegaETH pre-deposit event resolved on Tuesday after a cascade of technical failures disrupted what was supposed to be a controlled opening to verified users.
In post X team he said that configuration errors and rate limiting issues caused the Know Your Customer system to crash on the platform. The initial deposit was an early window for verified users to lock in their MEGA token allocation.
In addition to the KYC failures, the fully signed Safe and sound Multisig deal – primed for a later capitalization enhance – was completed prematurely, allowing modern deposits to flow in and pushing the raise beyond its intended $250 million cap.
“The $250 million cap is being filled by people who spammed the pre-deposit site refresh and managed to catch a random open time,” the minutes say.
Ultimately, MegaETH froze $500 million in deposits and abandoned plans to enhance the raise to $1 billion. Retro and withdrawal option will be available soon.
“At no point were the assets at risk, but that doesn’t matter; we expect more from ourselves and there are no excuses,” the team added.
MegaETH is an Ethereum Layer 2 protocol designed to provide ultra-low latency block processing and throughput comparable to a real-time Web2 application.
Some users praised MegaETH’s transparency in explaining what happened, but others were much more critical. AzFlin, a programmer and founder of the DAO, argued that the bugs could have been prevented if engineers had been more careful.
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Summary of the oversubscribed MegaETH auction
The pre-deposit window appeared right after the MEGA MegaETH token auction that started on October 27 and was fully subscribed within minutes.
This sale included 5% of the 10 billion token supply, with bids ranging from $2,650 to $186,282 and an optional one-year suspension that provided a 10% discount.
The auction ended on October 30, ultimately attracting more than $1.3 billion in pledges and becoming one of the most crowded auctions of the year.
As deposits were well above the upper limit, MegaETH stated that it would rely on a “special allocation mechanism” to determine the amount each participant would ultimately receive.
MegaETH is created by MegaLabs, a team supported by key industry figures, including Ethereum co-founders Vitalik Buterin and Joe Lubin.
After launching a testnet in March, the project now aims to achieve 100,000 transactions per second with sub-millisecond latencies. The MEGA token is scheduled to launch in early 2026.
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