coindesk.com
MegaETH will return all user funds deposited into its pre-launch “Pre-Deposit Bridge,” reversing a campaign that was meant to preload liquidity for USDm — the stablecoin that will anchor the network’s Frontier mainnet — but instead devolved into one of the most disorderly raise attempts of the year.
We've decided to return all funds raised from the Pre-Deposit Bridge.
— MegaETH (@megaeth) November 27, 2025
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:
The team said the execution “was sloppy” and that user expectations around a $250 million cap were not aligned with its internal goal of pre-seeding collateral to ensure 1:1 conversion at mainnet.
All deposits will be refunded through a new smart contract that is currently under audit.
While MegaETH emphasized that no funds were ever at risk, the decision follows a blow-by-blow breakdown shared by the team detailing how a series of small technical failures — compounded by operational missteps and misconfigured infrastructure — produced a chaotic, unfair sale process.
The issues began immediately at launch, when transactions failed because the contract contained an incorrect SaleUUID, requiring a 4-of-6 multisig update.
At the same time, Sonar, the KYC provider handling identity checks for deposits, applied an unexpectedly strict rate limit that blocked large portions of user traffic. It took more than twenty minutes for the team to identify and fix the issue.
Once the system resumed, deposits opened at a randomized time. Users who were refreshing the page managed to fill the entire $250 million cap within minutes, while those relying on official communications were effectively locked out.
A decision was then made to raise the cap to $1 billion — but the transaction to lift the cap was executed roughly 30 minutes early by an external party.
Because Safe multisig transactions become executable by anyone once the required signatures are met, the team lost control of the scheduled timing.
Attempts to contain the inflow by lowering the cap to $400 million failed as inflows outpaced transaction confirmation. A second attempt at $500 million stuck, but by then the team suspended the planned expansion to $1 billion and halted the entire process, citing unresolved bugs in the KYC flow.
MegaETH said depositors will be recognized later, though it stopped short of specifying how. As such, the USDm and the USDC to USDM conversion bridge will reopen ahead of Frontier mainnet to build liquidity under a more controlled setup.
The incident adds new pressure on MegaETH to prove the rest of its roadmap is production-ready.