Quick Breakdown
- MegaETH to refund all pre-deposit funds after misconfigured multisig and bridge outage disrupted USDm launch.
- Deposits unintentionally reopened early, pushing contributions beyond $400M.
- Refunds will begin after a contract audit, with a new USDC–USDm bridge planned before the Frontier mainnet beta.
Ethereum Layer-2 project MegaETH says it will return all funds contributed during its USDm pre-deposit event, after a string of operational failures caused deposits to overshoot intended limits and undermine the launch.
The project confirmed that more than $400 million will be refunded once a dedicated repayment contract completes an ongoing security audit.
Technical failures trigger unplanned reopening
MegaETH opened pre-deposits for its upcoming stablecoin, USDm, on Tuesday with a cap of $250 million, a target that was hit within minutes. Before that, however, users faced an hour-long outage due to an inaccessible third-party bridge provider, delaying early participation.
We’ve decided to return all funds raised from the Pre-Deposit Bridge.
Execution was sloppy and expectations weren’t aligned with our goal of preloading collateral to guarantee 1:1 USDm conversion at mainnet.
How this decision impacts you:
— MegaETH (@megaeth) November 27, 2025
The team then moved to raise the cap to $1 billion, but during that process, a critical error occurred. A multisig transaction controlling contract parameters was mistakenly configured to require four-of-four signatures, instead of the usual three-of-four.
This misconfiguration created an exploitable gap that allowed an external actor to execute the queued transaction 34 minutes early, reopening deposits prematurely and causing totals to surge past $400 million.
MegaETH made several attempts to stabilize the situation, lowering the cap, then raising it again, but ultimately halted the expansion plan and opted for a full refund.
Refunds coming after audit completion
The team has drafted a refund contract and is now awaiting a full audit. Repayments will begin once the review is complete, according to MegaETH. A redesigned USDC–USDm conversion bridge is expected to go live before the network’s Frontier mainnet beta.
What MegaETH aims to deliver
MegaETH positions itself as a next-generation Ethereum Layer-2 capable of up to 100,000 transactions per second, sub-millisecond latency, and fees below $0.01, a massive leap from Ethereum’s ~30 TPS.
The network uses proof-of-stake and promises a performance-based reward system for MEGA stakers. Governance via a DAO, along with the full staking architecture, is scheduled to roll out 12–18 months after mainnet launch.
Meanwhile, Ethereum’s highly anticipated Fusaka upgrade is now active on the blockchain’s final testnet, Hoodi, marking the last major milestone before its mainnet rollout on December 3.
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