MegaETH to Refund $400 Million After USDm Launch Issues

Summary:
Ethereum Layer-2 project MegaETH is set to refund over $400 million due to operational failures experienced during the launch of its native stablecoin, USDm. The project faced technical issues related to a misconfigured multisig and problems with a third-party bridge.

Key Takeaways

MegaETH will refund all funds raised through its Pre-Deposit Bridge amounting to over $400 million.
The refund is due to a misconfigured multisig transaction and issues with a third-party bridge provider.
The launch of USDm was marred by technical disruptions, including an early reopening of the deposit platform.
Future plans include a new bridge for USDC to USDm and an upcoming mainnet beta launch.

MegaETH Refund Announcement

Major Refund Announcement

Ethereum Layer-2 project MegaETH recently declared that it will refund over $400 million collected during the pre-deposit phase for its stablecoin, USDm, as a result of technical glitches. According to a statement issued by the project, these refunds are a direct consequence of operational failures that hindered the launch.

The project experienced several technical difficulties, notably a misconfigured multisig transaction intended to manage the deposit platform. This error led to the platform reopening prematurely, resulting in total deposits exceeding $400 million. Refunds will begin once a smart contract audit is completed, and a new bridge connecting USDC and USDm is expected before the mainnet's beta launch.

Technical Challenges Faced at Launch

On Tuesday, MegaETH launched pre-deposits for USDm with an initial limit set at $250 million. However, the launch faced complications right from the start. A technical issue with a third-party bridge provider left the service unavailable for around an hour, causing delays for eager users.

When the platform resumed operations, it quickly hit the $250 million deposit limit within minutes. Consequently, the MegaETH team announced an intention to increase the deposit cap to $1 billion.

During the process to raise this cap, a multisig transaction that governed contract settings was incorrectly set up. Instead of requiring three out of four approvals, it was mistakenly configured to need all four. This misconfiguration permitted an external party to execute a queued transaction nearly 34 minutes before the bridge was meant to reopen, leading to earlier than expected deposits that exceeded $400 million.

To address the matter, MegaETH attempted to control the situation by lowering the deposit cap to $400 million, then later adjusting it to $500 million, ultimately deciding against raising it to $1 billion.

Commitment to Refund Participants

In light of these developments, MegaETH has confirmed that it will return all funds to users who participated in the pre-deposit phase. The refund contract is currently under audit, and repayments will commence once the review is completed.

Future Plans for MegaETH

MegaETH aims to reopen its conversion bridge between USDC and USDm prior to the release of its Frontier mainnet, which is set to enter the beta stage.

MegaETH is built on the Ethereum Layer-2 protocol, focusing on enhancing transaction speed and reducing costs for blockchain applications. While Ethereum can process approximately 30 transactions per second, MegaETH claims to be capable of handling up to 100,000 transactions per second, with sub-millisecond latency and fees under $0.01.

The network operates on a proof-of-stake system that determines staking rewards based on performance. Holders of MEGA tokens will have the opportunity to participate in governance through a decentralized autonomous organization (DAO), enabling them to vote on future developments. Both the DAO and the complete staking framework are anticipated to launch within 12 to 18 months following the mainnet's launch.