MegaETH canceled its $500 million pre-deposit after a series of technical errors, including an incorrect SaleUUID in the smart contract and massive blockages due to the KYC provider.
MegaETH refunds its supposed USDm preloading
The official goal was clear: to pre-seed the collateral for the future stablecoin USDm to ensure a 1:1 conversion at the Frontier mainnet launch. However, execution quickly went off track. Transactions failed from the start. The smart contract had a faulty SaleUUID, requiring a fix via a 4-of-6 multisig. A low-level error that should have been detected before going live.
Meanwhile, Sonar, the KYC provider, imposed a much stricter rate limit than expected. As a result, most user traffic was blocked. It took the team about twenty minutes to identify and resolve the issue.
A $250 million cap filled in minutes, then an early raise
Once the fixes were applied, the deposit reopened at a random time. Bad news for those waiting for an official announcement. Users already refreshing the page gained the upper hand. The initial $250 million filled in minutes, creating an immediate sense of injustice.
To try to make amends, MegaETH decided to raise the cap to $1 billion. However, the transaction to increase this cap was executed thirty minutes too early… by an external entity. With a Safe multisig, any transaction validated by the quorum can be executed by anyone. A well-known governance loophole, but problematic in this case.
The team then tried to lower the cap, first to $400 million, then to $500 million. Too late. Deposits saturated faster than corrective transactions were confirmed. Consequently, MegaETH permanently abandons the expansion to $1 billion and puts the entire system on hold, citing persistent bugs in the KYC flow this time.
MegaETH promises refunds and a controlled reopening
The company assures that no funds were ever at risk and that a new smart contract, currently under audit, will be used to refund all participants. It also states that depositors will be ‘recognized’ later, without detailing the specifics.
The USDm bridge and the USDC to USDm conversion will be reopened before the Frontier mainnet launch, this time in a better-controlled environment. It remains to be seen if MegaETH will be able to restore confidence after this false start. The pressure is on: the rest of the roadmap will need to be flawless.
