MegaETH Funding Chaos Sparks Outcry After Technical Meltdown

MegaETH’s planned pre-deposit window collapsed on Tuesday after several technical faults derailed what the project intended to be a slow, orderly opening for verified users. The team stated on X that configuration mistakes and rate-limit caused its identity-verification system to break down. 

The early access phase was meant to give approved users a chance to secure MEGA token spots before the wider community.

Technical Breakdowns Trigger Cap Breach

The situation worsened when a fully signed Safe multisig transaction fired earlier than intended. This unexpected trigger opened the door for fresh deposits, pushing the raise past its planned $250 million ceiling. 

According to the team, the cap was reached largely by users repeatedly refreshing the pre-deposit webpage, eventually catching the brief moment when the system went live.

MegaETH halted deposits at $500 million and canceled plans to expand the raise to $1 billion. The project said a full review and a withdrawal feature would be made available soon. While the team stressed that user funds were never in danger, it acknowledged that the series of mistakes fell short of its own standards.

MegaETH functions as an Ethereum layer-2 system aiming for extremely fast block processing, targeting delays small enough to feel like a mainstream Web2 service. Its growing user base has been watching closely, especially as the protocol inches toward wider release.

Community Split on Response as Earlier Auction Looms Large

Reactions to the incident were mixed. Several users commended MegaETH for explaining the issues in detail, though others were far less forgiving. Developer and DAO founder AzFlin argued that the mishaps could have been avoided with greater caution from the engineering team.

The troubled pre-deposit period followed the project’s recent MEGA token auction, which opened on Oct. 27 and sold out within minutes. 

That event offered 5% of the total 10-billion-token supply. It attracted bids from $2,650 to $186,282 and also gave a discount for those ready to accept a one-year lock-up. By the time the auction closed on Oct. 30, commitments topped $1.3 billion. It became one of the most crowded raises of the year.

Due to demand far crossing limits, MegaETH said it will use a “special allocation mechanism” to determine final distributions. MegaETH is developed by MegaLabs, a group supported by prominent industry figures such as Vitalik Buterin and Joe Lubin. 

After launching its testnet in March, the project set a goal of 100,000 transactions per second. The team aimed at MEGA token launch in early 2026.