$400 Millions Vaporized! MegaETH Stumbles on Fatal Multisig Error!

Source: TokocryptoBlog Original Title: $400 Millions Vanishing! MegaETH Stumbles on Fatal Multisig Error! Original Link: https://news.tokocrypto.com/400-juta-menguap-megaeth-tersandung-kesalahan-multisig-fatal/ MegaETH, an Ethereum-based Layer-2 project, officially announced that it will return more than $400 million user funds after the launch of its new stablecoin, USDm, ended in chaos. The decision to refund was made following a series of technical errors, internal miscommunication, and operational chaos that led to deposits soaring far above the initial target.

Bridge Failed, Funds Surge Out of Control

The Pre-Deposit Bridge USD was initially designed to gather up to $250 million to prepare liquidity ahead of the stablecoin's launch. However, the plan went off track immediately after the following occurred:

• Technical issues with the third-party bridge provider that rendered the service inaccessible for nearly an hour.
• SaleUUID error in the contract that causes the transaction to fail and forces the team to make repairs through 4-of-6 multisig.
• KYC restrictions by Sonar, which limit traffic and prevent many users from participating.

After the issue was resolved, deposits flooded in and exceeded the limit within minutes. MegaETH attempted to raise the limit to $1 billion, but the situation only became more chaotic.

Multisig Error Triggers Early Bridge Opening

When trying to raise the deposit limit, the MegaETH team made a fatal error: an incorrect multisig configuration. Instead of 3-of-4, the transaction required four full signatures, allowing it to be executed by anyone once completed.

As a result, someone from outside executed the transaction 34 minutes earlier, reopening the bridge ahead of time and causing the deposit to soar past $400 million.

MegaETH's attempt to limit deposits to $400 million, then $500 million, and eventually cancel the plan to $1 billion, could not stem the chaos that occurred. Some users could enter quickly, while those relying on official information were left behind.

MegaETH Acknowledges Mistakes, Refunds Ready to Begin

MegaETH has finally acknowledged the existence of “sloppy execution” and the lack of synchronization between the internal team and the public. While asserting that user funds were never at risk, they admitted that the process was unfair.

Currently, the refund contract is being audited, and refunds will begin to be issued after the process is completed. Although no specific date is provided, MegaETH ensures that the refunds will be processed as quickly as possible.

Next Steps: New Bridge, Focus on Frontier Mainnet

After this incident, MegaETH promised to relaunch the USDC to USDm bridge with tighter operational oversight before entering the Frontier mainnet beta phase.

MegaETH continues to emphasize its vision as a high-performance Layer-2 network with:

• up to 100,000 TPS
• sub-millisecond latency
• transaction fee below $0.01
• as well as a proof-of-stake model with a performance-based incentive system

The staking feature and DAO governance are planned to be available 12–18 months after the mainnet launch.

Brief Analysis

Industry observers believe that MegaETH's decision to provide a full refund is commendable, although this launch is seen as an indicator that the team needs to improve operational readiness. The Frontier mainnet presents an important opportunity for MegaETH to restore community trust.