This is a Layer 2 solution (L2) with a claimed instant transaction finalization and a speed of 100,000 TPS. Going forward, these are the metrics that Ethereum Foundation (EF) wants to achieve for the underlying layer (L1).
Innovations on Layer 2 Solutions
Throughout 2024, EF's structure has been criticized for various reasons. Claims included, among others, the network's trend towards centralization and "skewed" towards L2 solutions, periodic sales of ETH reserves, and loss in competition with Solana.
After processing the massive amount of criticism from the community and investors, the organization was able to regroup, emphasize values and outline priorities.
On February 28, 2025, EF (Ethereum Foundation) announced the creation of the Silviculture Society, an independent group that will provide informal advice on key ecosystem development issues. The advice of outside experts will help the foundation make decisions while preserving the network's original ideals.
On March 2, EF announced leadership changes. Xiao-Wei Wang and Tomasz Stanczak have become the new executive directors.
The tech sector became more concrete and energetic in management. In November 2024, Buterin at the Devcon conference remembered the original vision of the ecosystem as a global distributed computing machine.
According to him, Ethereum is a worldwide computer that is regularly updated and improved, and L2 solutions are GPUs. L1 holds everything together and is the reason why the second layers can trust each other.
"The first level is not about being super-fast and making a million transactions per second. L1 is primarily about decentralization and reliability"," Buterin stressed.
Among the priority changes he identified:
- Increased decentralization, resistance to censorship, quantum resilience;
- improving scalability;
- achieving throughput of more than 100,000 TPS using L2;
- developing dapps like social networks and payment services.
Many of the above development vectors and priority goals are reflected in the white paper of the anticipated MegaETH. Given that Buterin does not usually invest in projects "without evolutionary value," his "angelic" support increases interest in the innovative startup.
Other participants in the first July 2024 cid round include Ethereum co-founder Joe Lubin, Dragonfly Capital and Robot Ventures funds, EigenLayer founder Sriram Kannan, Mert Mumtaz, head of Solana-infrastructure company Helius, Cobie Influencer, and others.
MegaLabs managed to raise a total of $20 million in its first approach; in a stage held on December 13, the ICO team raised an additional $10 million in just three minutes. A third round of fundraising through the sale of Fluffle's NFT collection gained ~$28 million.
How MegaETH Blockchain Works
The idea for the project was born in 2022 by Stanford graduate computer scientist Yilong Li. He was inspired by Buterin's work on a hypothetical network with 10,000 TPS that could remain trusted and censorship-resistant even with centralized blockchain creation.
Li teamed up with future CTO Lei Yan, a researcher in consensus, networking, and former EigenLayer employee.
Business operations were led by Shuyao Kong, ex-head of global business development at ConsenSys.
MegaETH is a modular rollup with parallel execution of transactions and a unique single sequencer decentralization architecture with a third-party data availability (DA) layer from EigenDA.
With the public testnet launching in the coming weeks, the network reached a speed of 15,000 TPS in private testing. It used 60 times more gas (1.5 gigas) than existing Ethereum rollups such as Base. This figure should double once the patented parallelization mechanism is activated. The target is 100,000 TPS and 10 gigas units.
MegaETH claims transaction execution times of less than 10ms, well below the 250ms of the fastest rollup - Arbitrum.
The team aims to reduce latency by offering computing capabilities close to the performance of centralized Web2 servers. A technical innovation of the blockchain is the use of RAM to store the entire state. This allows MegaETH to process requests faster than traditional solutions limited by the speed of SSD storage.
Additional acceleration is provided by the use of JIT compilation, which turns smart contracts into machine code directly at runtime, making complex computations more efficient.
Experts at analytics platform Nansen highlight the key differentiating features of MegaETH:
- new state tree structure. A memory- and I/O-efficient data structure that scales up to a terabyte at no additional cost, even on nodes with limited RAM;
- optimized storage. Improved storage architecture that increases write speeds while maintaining predictable read speeds to handle a huge stream of state updates;
- parallel execution. Separate strategies for block creation and verification avoid state conflicts and maximize speed;
- efficient state synchronization. Optimized peer-to-peer protocol for fast node synchronization with limited bandwidth;
- Streaming EVM (Streaming EVM). Real-time block processing mechanism enables the network to maintain a target block creation time of 1 ms.
There are four main roles in the "first real-time blockchain" network: sequencers, proof nodes, full nodes, and replication nodes.
The Sequencer is responsible for sequencing and executing user transactions. There is only one sequencer running on the network, reducing the need for consensus.
Proof nodes check blocks in a flexible order without storing states about the transaction.
Replication nodes receive updates from the sequencer and apply changes by updating their local states. They do not re-execute transactions, but check blocks using the proofs provided by the proof nodes.
Full nodes, in turn, verify each transaction to match blocks. These nodes are especially important for bridge operators and market makers who need fast finalization, which requires more powerful hardware to keep up with the sequencer.
Data Storage Outside Of Ethereum
Rollups are architecturally limited to hosting data in BLOB storage on Ethereum and are looking to decentralize their sequencers.
In this regard, in January 2025, Vitalik Buterin confirmed the further scaling of Ethereum via L2. He expressed concern about the current space limitation of BLOB objects and proposed a solution to the problem.
"With scheduled for March the release of the [update] Pectra we expect to double that number to six BLOB objects per slot". - he continued.
The indicator will increase two or three times more after the implementation of PeerDAS protocol, which will be the main goal of the next upgrade - Fusaka. In the near future, solutions already under development will achieve 128 arrays per slot.
MegaETH developers initially took a different path and turned to an alternative way of data placement - EigenDA from EigenLayer. Although the security mechanisms have not yet been subjected to real stress tests, it allows publishing blocks with a throughput of more than 100 MB/s, which significantly speeds up information processing and its transfer upon user request.
Ethereum developers Justin Drake and Dankerd Feist have expressed concerns about a similar mechanism to MegaETH. They stated the need to scale native DA on L1 instead of alternatives like EigenLayer's restacking platform, which pose a "big threat."
MegaETH's public face and head of development under the nickname Bread noted Ethereum's excessive focus on decentralization in a Cointelegraph comment. The pursuit of it has put L2 leaders like Base's Jesse Pollack in a desperate position, forcing them to find ways to scale faster.
"He's literally begging Ethereum developers and saying, 'Guys, we're getting blown away here, Solana is destroying us,'" Bread said, noting that Solana's prioritization of scalability has had a significant impact on the development of MegaETH.
Although some consider third-party data placement and the lack of consensus of multiple sequencers to be a problem, the blockchain device is equipped with decentralized second-order nodes. The combination of three P2P nodes provides distributed transaction verification and reduces the hardware requirements of node operators.
The test network of the "innovative" rollup launched on March 10, 2025.
Fast $28 million and MegaMafia
The third round of fundraising took place through the sale of SBT, which realized 5,000 NFTs at a price of 1 ETH. It is envisioned that 5% of the future token issue will be distributed to 10,000 NFT holders. Based on the latest estimate, the cost of the project is at least $540 million.
The team will release a total of 10,000 SBT in two rounds to active whitelisted users. They can unlock customizable items that will allow them to personalize their rabbits.
Each NFT will have several stages of development, evolving based on the owner's activity on the MegaETH network. The higher the stage, the higher the reward.
To attract developers and entrepreneurs, the team runs the MegaMafia program. This initiative includes support from the MegaLabs team, as well as participation in project meetings and hackathons.
Due to MegaETH's compatibility with EVM, dapps like Uniswap and Aave can be easily ported to this network. However, the main plan is to grow the ecosystem with new applications that can take full advantage of the high speed and bandwidth.
MegaMafia is working on several projects, including the high-speed decentralized exchange GTE, Valhalla's derivatives trading platforms.
One of the most innovative applications is Euphoria, a platform that turns trading into a game by allowing users to click on a chart to bet against its movement.
Of interest is Sweep, a streaming platform similar to Twitch that offers users to bet on various events. Also worth mentioning is Autonomous World Engine - a 3D world in the style of Roblox, where you can earn coins.
Early integration with testnet will allow you to evaluate the prospects of the project and see for yourself the speed, convenience and level of intuitive design of projects.
