Key Highlights
- MegaETH will refund all $400M from the USDm pre-deposit bridge after a failed launch.
- Technical outages and a misconfigured multisig transaction caused deposits to surge past $400M.
- The USDC-to-USDm bridge will reopen before the Frontier mainnet to restore liquidity.
MegaETH, an Ethereum Layer 2 blockchain project, has announced it will return all funds raised through its USDm pre-deposit bridge after the launch went wrong.
In an X post on Thursday, the firm stated, “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.”
Pre-deposit bridge launch goes off track
The pre-deposit bridge opened on Tuesday with an initial $250 million cap. It was supposed to collect funds to make sure the USDm stablecoin could convert 1:1 to US dollars when the mainnet goes live.
However, a technical outage at the third-party bridge provider made deposits inaccessible for about an hour. Once service was restored, the $250 million cap was filled in under three minutes, prompting MegaETH to raise the limit to $1 billion.
The situation worsened when a multisig transaction to increase the deposit cap was misconfigured. Instead of the intended 3-of-4 signature requirement, the transaction required all four signatures, which allowed an external party to execute it 34 minutes before the planned relaunch. The error caused deposits to surge past $400 million.
MegaETH tried to control the inflow by first lowering the cap to $400 million and then raising it to $500 million, but eventually suspended all further expansion.
Other issues added to the chaos. The initial contract contained an incorrect SaleUUID, which caused transaction failures that required a 4-of-6 multisig fix. At the same time, the KYC provider Sonar applied a strict rate limit that blocked large portions of users. Individuals who kept refreshing the page got in quickly, while others following official updates were left out.
Refunds and next steps for USDm
MegaETH stated no funds were lost and that all deposits will be refunded through a new smart contract, which is being checked carefully. “Depositor contributions will not be forgotten,” the team added.
Additionally, they plan to reopen the USDC-to-USDm bridge before the Frontier mainnet beta to make it easier for people to use USDm and build liquidity in a safe, controlled way.
USDm will anchor MegaETH’s Frontier mainnet. The network promises fast transactions, up to 100,000 per second, almost instant processing, and very low fees under $0.01. It will use a proof-of-stake system, letting MEGA token holders take part in governance through a decentralized organization.
Also Read: Tether Freezes $5M in USDT Again, Fueling Decentralization Debate
