MegaETH assured users that their contributions would not be forgotten, but clarified that any message or update must now meet compliance standards during the refund process.
MegaETH has announced that it will return all funds deposited into its Pre-Deposit Bridge. The Ethereum Layer 2 scaling solution has rolled back a pre-launch campaign intended to pre-load collateral for USDm, the native stablecoin of the network’s upcoming Frontier mainnet.
The team said the execution of the event “was sloppy,” noting that user expectations around an initial cap of $250 million were no longer in line with the goal of ensuring a 1:1 USDm conversion at launch.
MegaETH is pulling the plug
According to the project, the refund process will be handled by a new smart contract currently under review, with refunds issued once the review is complete. MegaETH detailed a series of technical and operational errors that occurred during the pre-deposit process, starting with the failure of transactions at launch due to an incorrect SaleUUID, which required a 4-of-6 multisig update, and exacerbated by strict rate limits applied by Sonar, the KYC provider, which blocked large parts of user traffic.
Once service was restored, deposits opened unexpectedly early and the $250 million limit was filled within minutes by users refreshing the page. Meanwhile, others who relied on official communications were unable to participate. A subsequent decision to raise the limit to $1 billion was derailed when a misconfigured 4-of-4 multisig transaction allowed a third party to implement the limit increase about 34 minutes early, reopening deposits and pushing contributions above $400 million.
Attempts to reset the limit to $400 million and later to $500 million failed as inflows exceeded transaction confirmations, prompting the team to halt the process completely. MegaETH emphasized that no funds were at risk and that depositor contributions “will not be forgotten,” but said all communications must meet compliance standards. The project confirmed that USDm remains central to its ecosystem and that the USDC-USDm conversion bridge will reopen ahead of the Frontier mainnet to build deeper liquidity and ease user onboarding.
Another controversy before the deposit
A similar incident turned up last month during Stable’s pre-deposit rollout, which provided a point of comparison for MegaETH’s current reset. Stable, a Layer 1 blockchain focused on stablecoin transactions, came under scrutiny during the first phase of its pre-deposit campaign after on-chain data showed that most deposits were made by a small cluster of large wallets before the official opening.
The $825 million cap for Phase 1 was reached in about 22 minutes. This ultimately asked accusations of front-running and insider involvement from community members who said the early influx left little room for private participants.
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