MegaETH has canceled plans to raise $1 billion after technical failures during its pre-deposit event left many users unable to participate. The Ethereum layer-2 project said the issues created an unfair process, though no funds were at risk. The team will open a withdrawal page for users who deposited during the event.
What Happened: Fundraise Collapses
The pre-deposit event encountered multiple technical failures that forced MegaETH to scrap its $1 billion target. The platform's infrastructure relied on a pre-deposit website that sent user information to Sonar, a service that verifies KYC details, while a pre-deposit contract managed sale timing and caps through a Safe multisig wallet.
The first problem emerged as a SaleUUID mismatch, a critical value linking the contract to Sonar. Early transactions failed because the value was incorrect.
A multisig update was required to fix the error, delaying the process.
Sonar's rate limit then proved insufficient for the traffic volume. KYC checks failed for more than 20 minutes while the team identified and resolved the bottleneck. When the sale finally opened at a random time intended to ensure fairness, users filled the original $250 million cap within moments.
MegaETH attempted to raise the cap to $1 billion at the next hour. But the upgrade executed early because any party can process a multisig transaction once signatures are collected.
The sudden change created confusion as some users saw the new window while others did not. The team tried limiting the raise to $400 million, then $500 million, but the cap was reached before adjustments could take effect.
With KYC bugs still blocking participants, MegaETH canceled the $1 billion extension.
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Why It Matters: Infrastructure Under Pressure
The failed fundraise exposes how demand can overwhelm blockchain infrastructure during high-stakes launches. The incident comes weeks after MegaETH launched its USDM stablecoin with a pre-deposit bridge in late November, a rollout that now faces questions about the platform's technical readiness for institutional-scale operations.
The project has said it will review the failures and provide a revised plan, but the episode raises concerns about whether layer-2 platforms can handle the coordination required for large fundraising events. Traders and potential investors are now waiting to see how MegaETH addresses the technical gaps and restores confidence in its infrastructure.
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