MegaETH's Bold Vision for the Endgame of Blockchain Performance

The cryptocurrency landscape witnessed a significant moment as MegaETH launched its public token sale, attracting over $340 million in commitments at maximum price in what represents one of the most substantial ICOs in recent memory. The Ethereum Layer 2 project, which promises sub-10 millisecond block times and 100,000 transactions per second, joined Lightspeed to discuss their technical architecture, token distribution philosophy, and why they believe centralized block production represents the future of blockchain scaling.

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In an era where airdrops have dominated token distribution strategies—often to the detriment of both projects and users—MegaETH's decision to pursue a public sale marks a notable return to earlier crypto principles of democratized access. The conversation between Lightspeed host Jack and MegaETH co-founders Lei and Namik revealed not just the technical ambitions of the project, but a broader philosophy about blockchain architecture, Layer 2 design, and the relationship between performance and decentralization.

The Endgame for Blockchain Performance

MegaETH positions itself as what the team calls "the endgame for blockchain performance scaling." The project represents a departure from conventional Layer 2 thinking, which has historically focused on maintaining as much decentralization as possible while achieving moderate performance improvements. Instead, MegaETH embraces what the founders describe as the maximum exploitation of the Layer 2 architecture's inherent advantages.

Lei explained the fundamental insight driving their approach: "The only path towards maximization of performance is to centralize block production. It's only with centralized block production can you have really low inter-block time and really high TPS because you can put a ton of resources—hardware, software, organizations—to have few sequencers and to really beef it up."

This represents a significant philosophical departure from many projects in the space. While other Layer 2 solutions often promise eventual sequencer decentralization, MegaETH openly acknowledges that their approach prioritizes performance above distributed block production. The end result, they argue, is what they term a "real-time blockchain."

The technical specifications that MegaETH aims to achieve are ambitious by any standard. Sub-10 millisecond block times represent a dramatic improvement over Solana's current 400 millisecond block times—a roughly 40x improvement. The 100,000 TPS target exceeds Solana's theoretical maximum of approximately 60,000 TPS. These numbers, while subject to real-world validation, suggest a blockchain capable of supporting application categories that simply cannot exist on current infrastructure.

Technical Architecture and Optimizations

The technical foundation of MegaETH involves multiple layers of optimization that address what the team has identified as the key bottlenecks in EVM execution. Lei outlined several critical innovations that enable their performance targets.

First, MegaETH implements parallelization of EVM transaction production. While sequential execution has been the standard for most EVM-compatible chains, parallel processing allows multiple transactions to be processed simultaneously, dramatically increasing throughput potential.

Second, the project adds JIT (Just-In-Time) compilation for smart contracts. As Lei explained, "EVM interpretation is one of the key bottlenecks." By compiling smart contracts at runtime rather than interpreting them instruction by instruction, MegaETH can achieve significantly faster execution speeds.

Third, and perhaps most significantly, MegaETH replaces the Ethereum Merkle Patricia Trie with an in-house data structure. The Merkle Patricia Trie, while elegant in its design, has long been recognized as a performance bottleneck for high-throughput applications. Lei identified this as "the main bottleneck of EVM block production," suggesting that their custom solution could deliver substantial improvements.

The cumulative effect of these optimizations, combined with centralized block production, creates what the team describes as "web-level performance and responsiveness." This represents a fundamentally different user experience compared to current blockchain interactions, where even the fastest chains introduce perceptible latency.

Sequencer Architecture and Decentralization Philosophy

The question of decentralization sits at the heart of many criticisms leveled at Layer 2 solutions. MegaETH addresses this directly, acknowledging their centralized sequencer while articulating a distinct philosophy about what decentralization should mean in the context of maximum performance.

Lei clarified that the team does plan to implement a form of decentralization, but one designed around performance constraints rather than traditional distributed consensus. "Centralized block production is more like clustered block production," he explained. "You have one leader or one machine pumping out a ton of blocks before you switch this active role to the next machine."

The physics of network latency makes more frequent rotation impractical for their performance targets. As Lei noted, "If you have two machines ping pong with each other, then the network latency between the two machines can become the critical component of inter-block time. Say I produce a block and I cannot expect Namik to just keep up and take over my job within 10 milliseconds because from the US to Turkey is probably 150 milliseconds of latency. It's just speed of light and physics."

Their solution involves "sequencer rotation" where the active sequencer role changes perhaps every hour or two hours, rather than every block. This rotation can even be scheduled to follow peak activity around the world, ensuring most users have the lowest possible access latency to the sequencer at any given time.

Importantly, the architecture preserves anti-censorship mechanisms. Users can skip a leader candidate if they're down, and the same accountability mechanisms that exist in other Layer 2 designs allow the community to reject a misbehaving sequencer. In the team's view, this delivers "almost all the benefits of a decentralized sequencer but just more performance minded."

Security Inheritance from Ethereum

A fundamental claim of Layer 2 architecture is that security properties are inherited from the underlying Layer 1. Given MegaETH's particularly aggressive approach to centralized block production, this inheritance becomes especially important. Lei provided a detailed explanation of how both safety and liveness are achieved.

For safety—meaning no reorganizations, no forking, and guaranteed finality—the mechanism is relatively straightforward. While the sequencer can technically reverse any block it produces in isolation, it anchors those blocks by submitting hashes or the blocks themselves to Ethereum Layer 1. All other followers—wallets, clients, exchanges, custodians—don't just listen to the sequencer. They look at the Layer 1 and follow the data blobs and anchors published there.

This process, called "derivation" in Layer 2 terminology, involves taking Layer 1 data as input and reconstructing the Layer 2 state. Since this process only uses Layer 1 state as input, and Ethereum is "by far the most decentralized blockchain in the world" and the "last chain to fork or to reorg," the derived Layer 2 chain inherits those same safety properties.

For liveness—ensuring that submitted transactions eventually get included—the mechanism involves an inbox contract on the Layer 1. If users want to force a transaction onto the Layer 2 (perhaps because the sequencer is censoring them), they can submit that transaction to the Layer 1 inbox. The derivation rules require the sequencer to grab all transactions in the inbox and include them, or else produce invalid blocks. This ensures transaction availability is anchored to Ethereum's liveness guarantees.

The ICO: A Return to Crypto's Roots

The MegaETH public sale represents more than just a funding mechanism—it reflects a philosophical commitment to democratized access that the team believes crypto has lost in recent years. Namik provided extensive context for their decision, framing it against the broader evolution of token distribution in the industry.

"When I got into crypto, the reason I was able to do decently well was because there were all these liquid opportunities in the market," Namik explained. "Crypto was first and foremost a liquid market of equal opportunity, equal access. What we saw in 2021, 2022, 2023 was the increasing level of effectively the role that primary markets have to play in price discovery."

The pattern became familiar: angel rounds, seed rounds, and then tokens launching at multi-billion dollar valuations with extremely low float and high FDV. Only insiders had meaningful exposure at reasonable prices, leaving public participants holding tokens that had already priced in years of growth. This pattern, Namik argued, "really burned CT and also burned crypto participants as a whole."

Airdrops emerged as the regulatory-friendly alternative, but they came with their own problems. They assume every user wants to be an owner and that user actions are genuine—assumptions that have "more or less failed." The exception, Namik noted, was Hyperliquid, where the airdrop was directly tied to trading fees, meaning power users received tokens representing their actual contribution.

MegaETH's token distribution began with their Echo round, which sold 5% of supply to public participants at the same terms and valuation as their private round with investors like Vitalik, Joe Lubin, Dragonfly, and Solana ecosystem figures like Mert and Austin. The round sold out in three minutes, with 80% of Echo users attempting to participate.

The Puffel NFT collection followed, implementing AML without KYC by screening wallets against sanctioned entities rather than requiring identity verification. While this blocked US non-accredited investors (the team couldn't distinguish accredited from non-accredited Americans without KYC), it provided another avenue for public participation at a $500 million valuation with 50% unlocked immediately and a six-month vesting period for the remainder.

Auction Mechanics and Valuation Philosophy

The public sale employs an English auction mechanism starting at a $1 million FDV and capped at $999 million—"just shy of unicorn" status. This cap represents a deliberate choice by the team to prevent unbounded price discovery in the primary market.

"We don't want there to be unbounded price discovery for auction because when you do that, someone always loses in the short term," Namik explained. "We want to pick something that we think is fair. Above this number we don't think it's fair anymore."

The $999 million cap drew surprise from some observers. For comparison, Pump.fun's token launched at a $4 billion FDV. Namik's response was direct: "Pump.fun is a fantastic company. They've been around a lot longer than us. They're a launched company. They had great numbers. Pump.fun had a different strategy than ours—they sold a large portion of the network, 25%, so there was a lot of demand and a lot to sell. With MegaETH we're selling a lot less of the network, so we're focusing less on how much we're selling and more on who we're selling to."

The sale includes a 10% discount for US accredited investors and global investors who agree to a one-year lockup. This creates a mechanism to identify and reward long-term aligned participants rather than short-term traders. As Namik put it, "This is really for two categories: our OG community members who have been riding MegaETH from day one with no economic incentive, and people who are in for the long haul who effectively have a vision of the MegaETH thesis and don't look at this as a quick trade."

The token distribution numbers themselves are notable. The MegaETH team holds just over 9% of supply, VCs have 14%, and public sale participants—people who actively chose to become owners—represent 15%. This makes the public the largest stakeholder category, an unusual arrangement in modern crypto projects.

Why Layer 2 Instead of Layer 1?

Given MegaETH's aggressive stance on performance and relatively centralized architecture, a natural question emerges: why not simply launch as a Layer 1? The team's answer reveals deep convictions about architecture and long-term sustainability.

Namik's response was blunt: "MegaETH cannot be as performant as a Layer 1. At least, not the kind of Layer 1 you're thinking of. What's the point of being a Layer 1 that has a few co-located validators that does not have the best architecture for the trade-offs? MegaETH settling onto Ethereum, inheriting Ethereum's security to enable that user experience, is a better trade-off."

The argument extends beyond technical architecture to ecosystem dynamics. "If we don't build it long-term, someone else will build it, and that person will win. Because for funds, for money, for users, it makes more sense to settle and use a Layer 2 that settles onto Ethereum and gives security promises compared to a Layer 1 that's fully centralized that, if the team decides to rug, can rug."

Lei expanded on this from a technical perspective: "We don't like to reinvent wheels. Layer 2s delegate the hard work of bootstrapping security to some other chain and just focus on transaction processing, sequencing, and transaction ordering. It's a modular way to build a blockchain—you don't attempt to tackle the entire stack, you focus your energy on one part of the stack which is execution."

The comparison to Hyperliquid—which launched as a Layer 1 with limited validators—was instructive. While Namik praised Hyperliquid as "brilliant," he noted a fundamental tension: "The more they decentralize their validator set, the more they become less competitive. The more margin they lose on performance. If you were a Layer 2, you wouldn't have to worry about this trade-off between validator size and decentralization and the impact on performance because you have the best of both worlds."

The L2 Parasitism Debate

A persistent criticism of Layer 2 solutions argues they extract value from Ethereum without providing commensurate returns. With recent protocol changes reducing fees paid to Layer 1 and Layer 2 transaction volume continuing to grow, some have argued that Layer 2s are "parasitic" to Ethereum.

Namik pushed back strongly on this framing: "This idea that Ethereum will go and play someone else's game and win is really stupid. Ethereum is not going to be more performant than Solana, not going to be more performant than Monad. Ethereum in my opinion is really good at one thing—that is their competitive edge. Ethereum is the most decentralized blockchain in the world. The second that changes, I think it's game over for ETH."

The alternative vision positions Ethereum as "the de facto settlement layer for the entire world." While critics might ask about revenue, Namik argued that if the entire crypto market 10x in size over the next six years, "there's enough demand to be the world's settlement layer for it to be intrinsically valuable."

The more serious concern, in his view, is Layer 2s that could eventually become Layer 1s—"vampire attacking Ethereum's liquidity, Ethereum's users" and then breaking away. This makes proper Layer 2 architecture—genuinely dependent on Layer 1 security—important for Ethereum's long-term health.

MegaETH's use of ETH as gas reinforces this connection. "MegaETH is only possible because of ETH," Namik stated. "Yes, the fees will be negligible. The fees don't matter in my opinion. What matters is MegaETH enabling design spaces no other Layer 1 can do, only enabling that because of Ethereum, and bringing on users and use cases and applications that can't exist anywhere else powered by ETH. Then ETH wins."

What Will 100K TPS Enable?

The question of whether crypto even needs 100,000 TPS represents a legitimate inquiry. Current usage patterns, even during peak demand, don't approach these numbers. The MegaETH team's response invokes historical parallels from computing history.

Lei shared an illuminating anecdote: "I was watching a Steve Jobs presentation from 2000 launching the Power Mac G4 Cube. He was very proudly stating that this Mac comes with a standard 32 megabytes of RAM and 1.5 gigabytes max. That was 2000. Look at my computer right now—it's 32 gigabytes of RAM, and my operating system manages to fill up 28 out of the 32 gigabytes."

The point extends further back: NASA launched rockets to the moon with just a few megabytes of RAM. In 2000, if you asked a programmer what they'd do with 32 gigabytes of RAM, they'd have no answer. Yet today we consume that capacity routinely.

"With a limited amount of resources it's always possible to do amazing things," Lei continued. "What we have right now on Ethereum and Solana given the current capacities is amazing—I think it's purely magical that we have such a big DeFi economy and ecosystem on the current blockchains. However, I don't think that's kind of the indication of what can be built if you 10x or 100x the capacity."

The immediate unlock may be less about raw TPS and more about latency. Namik pointed to euphoria, an application being built on MegaETH that enables "tap trade"—users tap on a tile representing a price target, and if the price reaches that level, they profit. This requires real-time price feeds, which MegaETH is implementing through a partnership with Chainlink.

Developer productivity represents another dimension. "A big part of the pain for smart contract developers is this gas golfing activity—just trying to squeeze out the last bit of gas from your contract," Lei noted. "It's bug-inducing and delivery-intensive. If you don't have to worry about gas, with higher TPS also comes higher gas limit, maybe each person can just build 2x, 3x, 4x more interesting apps."

This mindset of abundance could fundamentally change smart contract development from the assembly-language-like optimization currently required to something more akin to modern software development. "Programming in assembly language was what programmers did back in the 1980s and 1960s," Lei observed. "I don't think they could build the operating systems and browsers that we use today with just that limited toolchain. The same goes for smart contracts—it's really early now still for smart contract programming."

The Relationship Between MegaETH and Solana

Throughout the conversation, both hosts and guests acknowledged philosophical alignment between MegaETH and Solana, despite being on different base layers. Both projects prioritize performance and have made trade-offs accordingly.

Namik offered a nuanced perspective on Solana's market position: "Solana's market proposition in my opinion for the longest time was it was able to explore the trade-off curve of being slightly more centralized in the short term to effectively achieve a level of performance that no Layer 1 nor Layer 2 has ever been able to achieve. It was able to spawn an entire new design class—an entirely new design space for applications."

The acknowledgment came with admiration rather than competition. The MegaETH team noted inspiration from Solana's approach: application-focused development, strong product orientation, and community building. Their incubator, the "MegaMafia," where they work with teams in person for months to build applications, reflects this Solana-like focus on ecosystem development.

The comparison also highlights interesting contrasts. While Solana has historically emphasized throughput, MegaETH's initial unlock may be more about latency. The sub-10 millisecond block times enable user experiences impossible even on Solana's 400 millisecond blocks. Meanwhile, Solana benefits from genuine decentralization and validator diversity that MegaETH's architecture cannot match by design.

Both projects ultimately share a belief that blockchain performance limitations constrain what can be built. They simply pursue different paths to expanding those limits—Solana through optimized consensus and hardware requirements, MegaETH through Layer 2 architecture and centralized sequencing.

Moving Beyond Layer 1 vs Layer 2 Distinctions

Both Namik and Lei suggested that the industry's focus on Layer 1 versus Layer 2 distinctions may be unproductive. The more meaningful question concerns the properties and trade-offs each blockchain offers.

"Three years from now we're not going to be saying 'oh this is an L2, this is an L1,'" Namik predicted. "We're just going to be saying 'hey, this blockchain gives me this property with this trade-off.' If there's buzz words to be completely honest—if you have an L1 where all the values are controlled by the team, what's the point? Clearly the point isn't decentralization."

This framing suggests a maturation of blockchain discourse away from architectural categories toward utility-based evaluation. A billion-dollar DeFi position might warrant Ethereum Layer 1's security premium. A gaming application might prioritize MegaETH's latency. High-frequency trading might favor Solana's combination of speed and decentralization.

Lei echoed this perspective: "Many people, especially people who have doubts over Layer 2, I think they are mostly looking at blockchain from a construction-based view. They would probably imagine that there has to be a consensus algorithm, a bunch of nodes geographically distributed validating each other's work. But the end result—in aggregation, in abstraction—is just a computer-as-a-service that you can deploy code to and be sure is going to run your code correctly."

This utility-based perspective allows different architectural choices to coexist serving different needs. The question isn't whether Layer 2s are "real blockchains" but whether they deliver the properties users and developers need for their specific applications.

Blockchain as Next-Generation Cloud Computing

Perhaps the most philosophically interesting element of the conversation was Lei's characterization of blockchain as the next evolution of cloud computing—a perspective that reframes the entire industry.

"I view blockchain as a genie up there. It's a good custodian of any kind of computation that you want to entrust to it," Lei explained. "Basically, if you think of the cloud—yes, it has a ton of computational capacity and you can run your bank on it, you can run Google, you can run OpenAI. But you don't actually know what the cloud is actually going to do to your program. Maybe you tell the cloud to run this AI model, and will the cloud just sneak some malicious code into it? I don't know."

Blockchain, in this framing, is "an enhanced version of the cloud. In addition to being permissionless and accessible, it also guarantees correctness of execution and just openness to every user that potentially wants to access your application."

This perspective positions blockchain not as an alternative to traditional computing but as a natural evolution—adding verifiability and openness to the computational abundance that cloud computing enabled. It's "a very interesting complement of this cloud computing that we have been seeing for so many years probably starting from 2005."

The romantic view, as Lei described it, is of "a genie up there that you can deploy any kind of code to and be sure that the genie is going to execute your code correctly and make it accessible to anyone who wants to use your code."

KPI-Based Vesting and Stakeholder Alignment

Though not extensively discussed in the transcript, Namik mentioned "KPI vesting" as part of MegaETH's token structure—a mechanism where token unlocks are tied to performance metrics rather than just time. While details weren't elaborated, this represents another departure from standard token distribution practices.

Traditional vesting schedules release tokens based purely on time elapsed since launch, regardless of whether the project has achieved meaningful milestones. KPI vesting introduces conditionality—tokens only unlock when the protocol achieves specified objectives.

This mechanism can better align long-term incentives between team, investors, and users. If the team's tokens only fully unlock when the protocol achieves certain usage levels, TVL thresholds, or other metrics, they have concrete motivation to build toward those goals rather than simply waiting for time to pass.

The combination of KPI vesting, large public allocation, and capped auction pricing suggests MegaETH has thought carefully about stakeholder alignment—attempting to create structures where everyone's interests point in the same direction.

The MegaMafia and Application Development

MegaETH operates an incubator called the MegaMafia, where they work intensively with teams building on the platform. This in-person, multi-month engagement reflects a Solana-like emphasis on application development rather than purely infrastructure provision.

The approach acknowledges that blockchain infrastructure value ultimately derives from applications built on top. No matter how technically impressive MegaETH's architecture might be, its success depends on developers creating products that users want. The incubator model attempts to seed this ecosystem from day one rather than waiting for organic adoption.

This represents a maturation of blockchain go-to-market strategy. Earlier projects often launched infrastructure and hoped applications would follow. Modern launches increasingly involve coordinated application development, ensuring compelling use cases are available at or near mainnet launch.

The euphoria tap-trading application mentioned earlier exemplifies this approach—a product specifically designed to leverage MegaETH's latency advantages, developed in coordination with the core team, ready to demonstrate the platform's capabilities.

Regulatory Evolution and Token Distribution

The MegaETH ICO arrives at an inflection point in crypto regulation. As Namik noted, "The regulatory landscape effectively made it certain that none of us could run public sales or ICOs or anything where we let normal stakeholders, normal people, effectively show their conviction in a protocol."

That landscape appears to be shifting. MegaETH's ability to conduct a substantial public sale suggests regulatory clarity is emerging, at least in certain jurisdictions. The team's careful approach—KYC for Echo, AML-only for Puffel, structured auction mechanics for the public sale—demonstrates navigation of regulatory requirements while maintaining broad accessibility.

If this trend continues, we may see more projects pursuing public sales rather than airdrops. The benefits are substantial: genuine price discovery, stakeholder alignment, and elimination of the farming dynamics that have plagued airdrop distributions.

However, regulatory variation across jurisdictions remains challenging. MegaETH had to block US non-accredited investors from the Puffel sale due to their AML-only approach preventing them from distinguishing accredited from non-accredited Americans. These friction points will likely diminish as regulatory frameworks clarify, but currently require careful structuring.

Implications for the Broader Ecosystem

MegaETH's emergence has implications beyond just the Ethereum Layer 2 landscape. The project represents an extreme point on the decentralization-performance trade-off curve, pushing the boundaries of what can be achieved within a trust-minimized architecture.

For Solana, MegaETH serves as both complement and competitive pressure. On one hand, the projects share philosophical alignment and mutual respect. On the other hand, MegaETH's performance targets exceed what Solana currently achieves, potentially competing for performance-sensitive applications.

The key differentiator may be genuine decentralization. Solana's validator set, while sometimes criticized, represents real distributed consensus with multiple independent parties. MegaETH's centralized sequencer, despite planned rotation and accountability mechanisms, represents a fundamentally different trust model.

For Ethereum, MegaETH validates the Layer 2 roadmap while also highlighting tensions. If Layer 2s can achieve 100K TPS and 10ms blocks, what role remains for Layer 1? The answer, according to the MegaETH team, is as the "de facto settlement layer for the entire world"—a role requiring maximum decentralization rather than maximum performance.

For other Layer 2s, MegaETH sets a new benchmark. Projects can no longer simply offer modest improvements over Layer 1 while promising eventual decentralization. The market may increasingly demand either genuine decentralization or maximum performance, with the middle ground becoming less compelling.

Looking Forward

MegaETH's mainnet launch approaches, and the public sale represents a crucial milestone in the project's development. With over $340 million committed at maximum price, market enthusiasm is evident. But enthusiasm alone doesn't guarantee success.

The real test will come when mainnet launches and applications attempt to leverage the promised performance characteristics. Can MegaETH actually deliver sub-10 millisecond block times consistently? Does 100K TPS hold up under real load? Do applications emerge that genuinely require these capabilities?

The team's confidence is evident. Their willingness to cap the public sale at sub-unicorn valuation—declining the opportunity for higher primary market pricing—suggests conviction that value will be created through delivery rather than extracted through speculation.

For the broader crypto ecosystem, MegaETH represents an experiment in extreme performance prioritization. Whether that experiment succeeds could shape Layer 2 development for years to come, either validating the approach or demonstrating its limitations.

What's clear is that the project has stimulated important conversations about blockchain architecture, token distribution, and the relationship between Layer 1 and Layer 2 solutions. Regardless of outcome, those conversations advance the industry's understanding of what's possible and what trade-offs are acceptable.

The MegaETH ICO, in this light, isn't just a funding event. It's a referendum on a particular vision of blockchain's future—one where maximum performance is achievable within a Layer 2 architecture, where public token sales can replace extractive private rounds, and where Ethereum's value derives from being the world's settlement layer rather than its execution environment.

Time will tell whether that vision materializes. But with hundreds of millions of dollars committed and mainnet approaching, the crypto world is about to find out.

Facts + Figures

• MegaETH's public ICO attracted over $340 million in commitments at the maximum token price, making it one of the most significant public sales in recent crypto history.

• The auction is approximately 6x oversubscribed, demonstrating substantial market demand for the token.

• MegaETH targets sub-10 millisecond block times, compared to Solana's current 400 millisecond block times—a roughly 40x improvement.

• The project aims for 100,000 transactions per second, exceeding Solana's theoretical maximum of approximately 60,000 TPS.

• The public sale auction started at $1 million FDV and is capped at $999 million FDV.

• Team allocation is just over 9% of total supply, VCs hold 14%, and public sale participants represent 15%—making the public the largest stakeholder category.

• The Echo round sold 5% of supply at the same terms as private investors including Vitalik Buterin, Joe Lubin, Dragonfly, and Solana figures Mert and Austin.

• The Echo round sold out in 3 minutes with 80% of Echo users attempting to participate.

• US accredited investors and global participants can receive a 10% discount in exchange for agreeing to a one-year lockup.

• MegaETH implements parallelization of EVM, JIT (Just-In-Time) compilation for smart contracts, and replaces Ethereum's Merkle Patricia Trie with an in-house data structure.

• Sequencer rotation is planned every one to two hours rather than every block, to maintain performance while providing some distribution.

• Network latency between continents (e.g., US to Turkey) is approximately 150 milliseconds, making per-block rotation impractical for 10ms targets.

• The Puffel NFT collection implemented AML without KYC by screening wallets against sanctioned entities rather than requiring identity verification.

• MegaETH has partnered with Chainlink to bring real-time price feeds on-chain, enabling latency-sensitive applications.

• The MegaMafia incubator works with teams in-person for multiple months to develop applications for the MegaETH ecosystem.

• For comparison, Pump.fun launched at a $4 billion FDV and sold 25% of supply.

Questions Answered

What is MegaETH and how does it achieve such high performance?

MegaETH is an Ethereum Layer 2 blockchain designed for maximum performance, targeting sub-10 millisecond block times and 100,000 transactions per second. The project achieves this through centralized block production combined with multiple technical optimizations including EVM parallelization, JIT compilation for smart contracts, and a custom data structure replacing Ethereum's Merkle Patricia Trie. The founders argue that centralized block production is the only path to maximum performance, as distributing block production across geographically separated nodes introduces latency from network communication that cannot be eliminated due to the speed of light. By operating as a Layer 2 rather than Layer 1, MegaETH can pursue extreme performance while inheriting security properties from Ethereum's decentralized consensus.

How does MegaETH inherit security from Ethereum if it has a centralized sequencer?

MegaETH inherits both safety and liveness properties from Ethereum through its Layer 2 architecture. For safety (preventing reorganizations and ensuring finality), the sequencer anchors all produced blocks by submitting their hashes to Ethereum Layer 1. All followers—wallets, exchanges, custodians—derive the Layer 2 state from Layer 1 data rather than trusting the sequencer's word directly. Since Ethereum is the most decentralized blockchain and least likely to reorganize, the derived Layer 2 chain inherits these same properties. For liveness (ensuring transactions get included), users can submit transactions to a special inbox contract on Layer 1, which the sequencer must include per the derivation rules or produce invalid blocks. This ensures censorship resistance even with centralized block production.

Why did MegaETH choose an ICO instead of an airdrop for token distribution?

The MegaETH team believes airdrops have failed as a distribution mechanism because they assume all users want to be owners and that user actions are genuine—assumptions that have largely proven incorrect, leading to farming behavior and misaligned incentives. ICOs, in contrast, ensure that token recipients have genuine conviction in the project since they're committing capital. The team cites the regulatory environment that prevented public sales for years, forcing projects toward airdrops, but notes the landscape has become more favorable. MegaETH has structured their distribution to make the public the largest stakeholder category at 15% of supply, compared to 9% for the team and 14% for VCs, reflecting their commitment to democratized ownership.

Why is MegaETH a Layer 2 instead of a Layer 1 like Hyperliquid?

The team argues that MegaETH's performance characteristics are only achievable through Layer 2 architecture, not as a centralized Layer 1. A Layer 1 with few validators doesn't have "the best architecture for the trade-offs" and creates vulnerability—if the team decides to abandon the project, users have no security guarantees. Layer 2 settlement on Ethereum provides genuine security promises even with centralized sequencing. Additionally, the team notes that Layer 1s face an inherent tension between validator decentralization and performance—more decentralization means more performance loss. Layer 2s avoid this trade-off entirely by delegating security to the base layer while focusing purely on execution performance.

What applications will be possible on M