The MegaETH team, an Ethereum Blockchain solution project, has announced that it will return proceeds from investments raised through the initial deposit bridge after operational failures hampered the launch of its stablecoin USD Mapped-USDm.
Key points:
- The MegaETH team will return all early deposits in millions of dollars after admitting operational failures during launch.
- An error in the settings of a multi-signature transaction caused the system to open earlier than expected, resulting in deposits exceeding $400 million.
- Refunds have been frozen until the smart contract audit is complete, and a new USD Coin-USDC and USDm connector is expected to launch before the beta release on the main testnet.
The announcement was made yesterday, Thursday, through a publication on the X platform in which the team acknowledged the errors that occurred during the launch process. “The implementation process seemed flawed and expectations were not consistent with our goal of pre-loading collateral to ensure a 1:1 million conversion upon launch on mainnet,” the MegaETH account wrote.
Million-dollar MegaETH project pre-deposits halted after link crash
The MegaETH team opened million-dollar pre-deposits last Tuesday with an initial limit of $250 million. However, the launch faced frequent disruptions early on, as a technical issue with the external link provider made the service unavailable for about an hour while users waited for deposit activities to resume.
As soon as the platform resumed its activities, the limit of 250 million dollars was reached in a few minutes. Then the administration announced plans to raise the deposit limit to $1 billion, and things quickly got complicated.
During the process of increasing the deposit limit, a multi-signature transaction controlling the contract parameters was hastily and flawlessly created; Instead of requiring 3-4 approvals, the transaction needed to require all 4 signatures. This bug allowed an outside party to execute the pending transaction 34 minutes before the bridge officially reopened.
Thus, deposit operations resumed ahead of schedule and quickly exceeded $400 million. For its part, the MegaETH team tried to contain the situation by reducing the cap to $400 million, then later raising it to $500 million. After all, the project completely abandoned its plan to raise the cap to $1 billion.
The team also confirmed after the incident that they would return all funds to participants. The recovery contract is currently under review and payments are expected to begin upon completion of its review. The team said: “Depositors’ contributions will not be forgotten. »
USDm is an integral part of the MegaETH economy and will be supported by many Frontier applications.
It is for this reason that we will reopen the $USDC <> $USDM Conversion bridge before the Frontier mainnet to increase liquidity, making it easier to onboard users before launch.– MegaETH (@megaeth) November 27, 2025
Looking ahead, the team intends to reopen the USD Coin-USDm link before the Frontier mainnet releases in beta, and the team said the goal is to establish stable liquidity before a wider launch.
MegaETH Project: A second-layer solution capable of processing 100,000 transactions per second
MegaETH is a new layer two solution on the Ethereum blockchain, designed to improve transaction speed and reduce costs of blockchain applications, and is similar to networks such as Base, Polygon and Arbitrum.
While the Ethereum blockchain processes around 30 transactions per second (TPS), the MegaETH platform touts its theoretical ability to process up to 100,000 transactions per second, with latency of less than a millisecond and fees of less than $0.01.
The project will also use a proof-of-stake mechanism with a performance-linked system to calculate staking returns, and MegaETH holders – who pledge their holdings – will participate in governance through a decentralized autonomous organization (DAO), allowing them to vote on future changes to the project.
The DAO and staking protocol are expected to be fully launched approximately 12-18 months after the mainnet launch.
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