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MegaETH abandoned plans to expand its USDm stablecoin pre-deposit to $1 billion yesterday after a chaotic launch marred by KYC outages, a critical multisig misconfiguration, and uncontrolled inflows that pushed the total to $500 million in under two hours.
The pre-deposit opened at 9 a.m. ET Monday with a $250 million cap. Technical failures in the third-party bridge and Sonar’s KYC verification system blocked most users for the first 30 minutes. However, once that was fixed, the cap filled in 156 seconds.
At 10:15 a.m., the team queued a transaction to raise the limit to $1 billion. Because the Gnosis Safe was mistakenly set to 4-of-4 instead of 3-of-4, any signer could execute it once all signatures were collected. One hawk-eyed community member by the username “Olimpio”, spotted the pending transaction on Etherscan and triggered it roughly 30 minutes early, which allowed deposits to reopen without restriction. Inflows quickly exceeded $400 million before the team applied emergency patches and froze the cap at $500 million.
🍿 @MegaETH: PURE CINEMA 🍿
They won't be increasing caps to 1B anymore. What happened?
1. Pre-deposit campaign was scheduled for today, 9AM
2. Maximum deposit amount was 250M
3. At 9AM, website crashed and nothing worked for around 1 hour
4. When it started working, 250M caps…— olimpio (@OlimpioCrypto) November 25, 2025
Citing persistent KYC bugs, MegaETH canceled the $1 billion expansion, enabled withdrawals, and published a full post-mortem report. No funds were lost; and all contracts passed careful audits by Zellic and Slowmist.
We've encountered unexpected issues throughout the process and are no longer moving forward with the $1B cap.
We will be sharing a retro shortly.
We'll also be including the ability for users to withdraw who no longer wish to participate.
Apologies for the turbulence.
— MegaETH (@megaeth) November 25, 2025
Despite the operational failures, only 2% of depositors have withdrawn, and, if the ensuing commentary on X is anything to go by, the community remains overwhelmingly bullish.
FRANT’s viral thread dissected the events objectively, praising the fact that the project attracted that much demand (“$250M in 156 seconds). He says this proves the thesis, but had words of criticism for the execution.
MegaETH’s USDm pre-deposit just went full crypto chaos. The core thesis didn’t change.
If your timeline was spamming “@MegaETH”, “USDm” and “$250M cap in 156 seconds” and you felt late already, here’s what actually happened – and what still matters.
1. What launched today… pic.twitter.com/j2UHCVGnmG
— FRANT (@OGfrant) November 26, 2025
Many users maintain the glitches are part of growing pains for the Dragonfly and Electric Capital backed project, urging the team to relaunch the larger cap once issues are resolved. X user Mockors The Hodler and Captain Dackie’s roundup echoed calls for the $1B revival.
With the launch of Frontier beta looming in December, this tests MegaETH’s operational capacity ahead of 100k TPS claims. Success could cement it as Ethereum’s real-time L2 frontrunner; while further failure risks eroding trust in its $20 million seed backers.
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