MegaETH’s pre-deposit event went ahead on Tuesday after a cascade of technical outages disrupted what was supposed to be a controlled opening for verified users.
In an X post, the team said that configuration errors and rate limit issues caused the platform’s Know Your Customer system to fail. The pre-deposit was an initial 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 flood in and pushing the increase beyond its planned limit of $250 million.
“The $250 million cap is filled by individuals who spammed the pre-filing website and may have learned the random opening time,” the protocol states.
MegaETH ultimately froze deposits at $500 million and abandoned plans to expand the raise to $1 billion. A retro and withdrawal option will be released soon.
“At no time were assets threatened, but that doesn’t matter; we expect more from ourselves and there is no excuse,” 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, developer and founder of DAO, argued that the errors could have been avoided if engineers had been more careful.
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MegaETH Oversubscribed Auction Summary
The pre-deposit window follows MegaETH’s MEGA Token Auctionwhich opened on October 27 and was fully subscribed within minutes.
This 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 offering a 10% discount.
The auction ended on October 30, ultimately attracting more than $1.3 billion in commitments and becoming one of the busiest increases of the year.
Since contributions far exceeded the cap, MegaETH said it would rely on a “special allocation mechanism” to determine the amount each participant will ultimately receive.
MegaETH is built by MegaLabs, a team backed by major industry figures including Ethereum co-founders Vitalik Buterin and Joe Lubin.
Following the launch of Testnet in March, the project is now targeting 100,000 transactions per second with sub-millisecond latency. The MEGA token is expected to launch in early 2026.
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