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Ethereum News Update: MegaETH Halts $1 Billion Sale Amid Technical Issues Highlighting Scalability Problems

Ethereum News Update: MegaETH Halts $1 Billion Sale Amid Technical Issues Highlighting Scalability Problems

Bitget-RWA2025/11/25 22:56
By:Bitget-RWA

- MegaETH canceled its $1B fundraising after technical glitches caused premature deposits and KYC errors. - The protocol froze deposits at $500M, blaming spam traffic and misconfigured systems for exceeding the $250M cap. - Backed by Ethereum co-founders, MegaETH aims for 100,000 TPS with sub-millisecond latency but faces scaling challenges. - The incident highlights infrastructure risks in DeFi, with mixed reactions to the team's transparency and accountability. - MegaETH plans retroactive adjustments but

MegaETH, an

layer-2 solution focused on achieving extremely fast blockchain transactions, has decided to stop fundraising after technical setbacks during the pre-deposit phase caused the amount raised to surpass its intended ceiling. The project halted deposits at $500 million and revealed plans for a retroactive fix to resolve the problems, which included misconfigurations in its Know Your Customer (KYC) process and that was supposed to raise the cap.

The pre-deposit round, designed to let verified participants reserve tokens, fell apart as the platform’s systems buckled under heavy usage. The team behind the protocol admitted that "misconfigurations and rate-limiting failures led to the KYC system breaking down," while

—intended for a later increase in the cap—was triggered too soon, letting deposits surpass the $250 million goal. The team blamed the disruption on users flooding the pre-deposit portal at unpredictable times, though .

Ethereum News Update: MegaETH Halts $1 Billion Sale Amid Technical Issues Highlighting Scalability Problems image 0

MegaETH’s decision to halt fundraising highlights the difficulties of expanding major blockchain projects in a fiercely competitive environment. The protocol had previously made headlines with

that brought in over $1.3 billion, ranking among the largest crypto fundraisers of the year. Supported by Ethereum co-founders Vitalik Buterin and Joe Lubin, MegaETH with latency measured in fractions of a millisecond, aiming to rival conventional Web2 platforms.

This episode occurs as the Ethereum community continues to debate privacy and infrastructure dependability.

that privacy should be considered a basic standard in digital systems, a point he has elaborated on through Ethereum’s privacy-oriented projects, such as stealth addresses and zero-knowledge technologies. While MegaETH’s technical troubles underscore the dangers of moving too quickly, the project’s openness in describing what went wrong has received mixed feedback. Some applauded the team’s willingness to take responsibility, while .

The consequences of this incident could shape MegaETH’s future plans. The team intends to offer a retroactive correction and withdrawal options for those affected, but has yet to provide a timeline for restarting fundraising. Meanwhile, the competition among Ethereum layer-2 projects remains intense, with platforms like Aztec recently unveiling a fully decentralized mainnet, further raising the stakes for scalable and private blockchain solutions.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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