Multiple technical failures during MegaETH’s pre-deposit phase pushed the raise beyond its limit and forced the team to halt the sale.
News
MegaETH’s pre-deposit event unraveled on Tuesday after a cascade of technical failures disrupted what was meant to be a controlled opening for verified users.
In an X post, the team that configuration errors and rate-limit issues caused the platform’s Know Your Customer system to fail. The pre-deposit was an early window for verified users to lock in MEGA token allocations.
In addition to the KYC failures, a fully signed Safe multisig transaction — prepared for a later cap increase — was executed prematurely, allowing new deposits to flow in and pushing the raise past its intended $250 million limit.
“The $250M cap is filled by people who were spamming refresh on the Pre-Deposit Website and were able to catch the random opening time,” the protocol said.
MegaETH ultimately froze deposits at $500 million and scrapped plans to expand the raise to $1 billion. A retro and a withdrawal option will be released shortly.
“At no point were assets at risk, but that doesn’t matter; we expect higher of ourselves and there are no excuses,” the team added.
MegaETH is an Ethereum layer-2 protocol designed to deliver 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 far more critical. AzFlin, a developer and DAO founder, argued that the mistakes could have been prevented if engineers had been more careful.
Related:
The pre-deposit window came on the heels of , which opened on Oct. 27 and was fully subscribed within minutes.
That sale offered 5% of the 10-billion-token supply, with bids ranging from $2,650 to $186,282 and an optional one-year lock-up that provided a 10% discount.
The auction closed on Oct. 30, ultimately drawing more than and becoming one of the year’s most crowded raises.
Because contributions far exceeded the cap, MegaETH said it would rely on a “special allocation mechanism” to determine the amount each participant ultimately receives.
MegaETH is built by MegaLabs, a team backed by major industry figures including Ethereum co-founders Vitalik Buterin and Joe Lubin.
Following its testnet launch in March, the project is now targeting 100,000 transactions per second with sub-millisecond latency. The MEGA token is set to launch in early 2026.
Magazine:
