MegaETH is reversing its pre-launch “Pre-Deposit Bridge” initiative and returning all user funds after a cascade of technical and operational failures turned the campaign into one of the year’s most disorderly fundraising attempts.

According to the team, the process “was sloppy,” and user expectations around a $250 million cap deviated sharply from the project’s internal goal of preloading collateral to ensure 1:1 USDm conversion when the Frontier mainnet goes live. All deposits will be refunded through a new smart contract currently undergoing audit.

The problems began immediately at launch. Transactions failed out of the gate due to an incorrect SaleUUID embedded in the contract, forcing a 4-of-6 multisig update. Simultaneously, Sonar — the KYC provider responsible for identity verification — imposed an unexpectedly strict rate limit that throttled large segments of user traffic. It took the team over twenty minutes to identify the issue and restore flow.

When deposits finally opened, they did so at a randomized moment. Users who continuously refreshed their screens quickly filled the entire $250 million cap within minutes, while those relying solely on official updates were effectively shut out.

In response, the team attempted to raise the cap to $1 billion. However, the transaction was executed roughly 30 minutes early by an external party, as Safe multisig transactions become executable by anyone once signatures are complete. Efforts to curb inflows by lowering the cap — first to $400 million, then to $500 million — were outpaced by ongoing deposits. By the time the team halted the process entirely, bugs in the KYC flow remained unresolved.

MegaETH stressed that no user funds were ever at risk and indicated that depositors will be acknowledged in the future, though specific details were not provided. The USDm and the USDC-to-USDm conversion bridge will reopen before Frontier mainnet launch under a more controlled system designed to build liquidity without the earlier chaos.

The episode now places added scrutiny on MegaETH as it works to demonstrate that the rest of its roadmap is ready for production.