MegaETH Issues Refunds After Rocky USDm Launch

MegaETH, an Ethereum Layer-2 solution, is issuing full refunds to users who pre-deposited funds for its native stablecoin, USDm. This decision follows a series of operational errors that plagued the launch and ultimately prevented the stablecoin from functioning as intended.

Key Takeaways:

• Full Refunds: MegaETH will reimburse all USDm pre-deposits due to significant launch issues.
• Multisig Mishap: A misconfigured multisignature transaction led to a premature reopening of deposits, resulting in over $400 million pouring in.
• New Bridge Planned: A re-engineered USDC-USDm bridge will be introduced before the mainnet beta launch to provide a more stable environment.

The initial USDm pre-deposit launch aimed for a $250 million cap. However, a third-party bridge outage caused immediate disruptions. Once resolved, the cap was hit within minutes, prompting the team to raise it to $1 billion. This is when the situation truly unraveled.

During the cap increase, a critical error occurred in the multisignature transaction controlling the contract parameters. Instead of requiring the intended three out of four approvals, it was set to require all four. This mistake allowed an external entity to execute the transaction prematurely, restarting deposits almost 34 minutes before the scheduled reopening. The floodgates opened, and deposits exceeded $400 million.

While MegaETH attempted damage control by adjusting the deposit cap multiple times, they ultimately decided to scrap the expansion entirely. A refund contract is currently under audit and repayments will begin shortly following the audit's completion.

Looking forward, MegaETH plans to redeploy its conversion bridge between USDC and USDm ahead of its Frontier mainnet release, intended as the network's beta phase. This aims to ensure stable liquidity.

MegaETH envisions itself as a high-throughput Layer-2 network, claiming a theoretical capacity of 100,000 TPS, significantly faster than Ethereum's current 30 TPS.