MegaETH Reverses Entire $500M Pre-Deposit Following a String of Operational Missteps

MegaETH is rolling back its pre-launch “Pre-Deposit Bridge” after a cascade of technical glitches and operational errors forced the team to abandon the effort and refund every user deposit. What was intended to be a straightforward liquidity-seeding campaign for USDm — the stablecoin that will underpin the Frontier mainnet — instead became one of the most disorderly fundraising attempts of the year.

According to the team, the rollout suffered from misaligned expectations and poor execution. While users believed the raise was capped at $250 million, MegaETH internally viewed the initiative as a way to preload collateral to support seamless 1:1 USDm conversions at mainnet launch. The project said all funds will be returned through a newly created smart contract that is currently under audit.

Problems emerged immediately. At launch, deposits failed because the contract had been deployed with an incorrect SaleUUID, which required a 4-of-6 multisig amendment. Simultaneously, Sonar — the identity-verification provider — imposed an unexpectedly strict rate limit, blocking large segments of deposit traffic. It took more than twenty minutes for the team to diagnose and fix the issue.

Once deposit activity resumed, it opened at a random moment instead of the communicated time. Users who had been continuously refreshing their screens managed to fill the entire $250 million cap within minutes, while those waiting on official notifications were effectively sidelined.

The team then attempted to raise the cap to $1 billion. But the multisig transaction to increase the limit executed roughly thirty minutes earlier than planned after an external party triggered it — a known quirk of Safe multisigs, where transactions become permissionless to execute once enough signatures are gathered. Attempts to limit the inflow by dropping the cap to $400 million, and later $500 million, failed as deposits continued outpacing the contract updates. With additional KYC bugs surfacing, MegaETH ultimately halted the entire process.

MegaETH said that depositors will be acknowledged in the future, though it did not specify how. The USDm and USDC-to-USDm conversion bridge will reopen ahead of Frontier mainnet under a more predictable and controlled framework.

The debacle adds pressure on the project to demonstrate that the remainder of its roadmap — particularly the infrastructure supporting launch — can meet production standards without repeat failures.