MegaETH's Bold Vision: Building the Ultimate Performance Layer for Ethereum

The cryptocurrency world witnessed a significant event as MegaETH, an ambitious Ethereum Layer 2 project, launched its Initial Coin Offering with over $340 million committed at the maximum token price. In a wide-ranging conversation on the Lightspeed podcast, MegaETH co-founders Lei Yang and Namik Muduroglu laid out their vision for what they describe as "the end game for blockchain performance scaling." Their project promises sub-10 millisecond block times and 100,000 transactions per second—numbers that would represent a quantum leap beyond even Solana's current capabilities.

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The discussion illuminated fundamental questions about blockchain architecture, the relationship between Layer 1 and Layer 2 chains, and the philosophical approach to decentralization. What emerged was a picture of a team that has thought deeply about the trade-offs inherent in blockchain design and has made deliberate choices to optimize for raw performance while maintaining security guarantees through Ethereum's base layer.

The Core Architecture of MegaETH

MegaETH represents a fundamentally different approach to Layer 2 design. The project's central insight, according to Lei Yang, is that centralized block production is "the only path towards maximization of performance." This may sound controversial in a space that prizes decentralization, but the MegaETH team argues that this approach, when combined with Ethereum's security guarantees, offers the best of both worlds.

The technical architecture involves what Yang describes as "clustered block production," where a single leader machine produces blocks for an extended period before rotating to another sequencer. This stands in contrast to traditional consensus mechanisms where the active role of block production frequently switches between geographically distributed nodes. The physics are simple: when block producers are spread across the globe, network latency—governed by the speed of light in fiber optic cables—creates unavoidable delays.

"From the US to Turkey is probably 150 milliseconds of latency. It's just speed of light is physics," Yang explained. This fundamental constraint means that any system requiring frequent leader rotation will necessarily sacrifice block time performance. MegaETH's solution is to embrace this reality and optimize for it.

Technical Optimizations Under the Hood

The MegaETH team has implemented a comprehensive suite of optimizations to achieve their performance targets. These include parallelization of EVM transaction processing, just-in-time compilation for transaction execution, and a complete replacement of Ethereum's Merkle Patricia Trie data structure with an in-house alternative.

The EVM interpretation layer, which processes smart contract code, was identified as a major bottleneck in traditional Ethereum execution. By implementing JIT compilation, MegaETH can convert frequently-executed code paths into native machine instructions, dramatically reducing execution overhead. This is analogous to how modern JavaScript engines like V8 achieve performance competitive with compiled languages.

The Merkle Patricia Trie, while elegant for its cryptographic properties, imposes significant overhead on state access patterns common in high-throughput applications. MegaETH's replacement data structure maintains the necessary security properties while optimizing for the access patterns that actually occur in production smart contract execution.

Security Model and Ethereum Inheritance

A critical question for any Layer 2 system is how it inherits security from its parent chain. Yang provided a detailed explanation of the two fundamental properties any blockchain must guarantee: safety (no reorgs or reversals of finalized transactions) and liveness (legitimate transactions eventually get included).

For safety, the mechanism is straightforward. The sequencer publishes block hashes or complete block data to Ethereum Layer 1. When wallets, exchanges, or other clients want to determine the canonical state of the Layer 2, they don't simply trust the sequencer—they perform what's called "derivation," reconstructing the Layer 2 state from the data anchored on Ethereum. Since Ethereum is "by far the most decentralized blockchain in the world," as Yang put it, and therefore the least likely to experience reorgs, the derived Layer 2 state inherits this finality.

Liveness is guaranteed through a mechanism called "forced inclusion." Users can submit transactions directly to an inbox contract on Ethereum Layer 1. The derivation rules require the sequencer to include these transactions in their blocks. If a sequencer attempts to censor a user, that user can bypass the sequencer entirely by posting to the Layer 1 inbox. This creates a credible guarantee that no sequencer can permanently exclude any user from the system.

"The sequencer, because of the derivation rule, because it does not want to produce an invalid block, is forced to grab all the transactions in the Layer 1 inbox and prepend them to the block it's producing," Yang explained. This elegant mechanism converts Ethereum's liveness guarantees into liveness guarantees for the Layer 2.

The Philosophy Behind Token Distribution

The MegaETH team's approach to token distribution reflects a deliberate philosophy about ownership and incentive alignment in crypto projects. Namik Muduroglu provided extensive context on their decision-making process, tracing the evolution of token distribution models in the cryptocurrency industry.

"I remember when I got into crypto, the reason I was able to do decently well was because there were all of these liquid opportunities in the market," Muduroglu recalled. "Crypto was first and foremost a liquid market of equal opportunity, equal access." He argued that the trend toward high-FDV, low-float token launches with extensive private rounds has fundamentally distorted price discovery and burned retail participants.

The regulatory landscape of 2021-2023 pushed projects toward airdrops as a distribution mechanism, but Muduroglu expressed skepticism about this approach: "Airdrops are interesting because they assume that every single user wants to be an owner. And they also assume that the actions of the user are genuine." The prevalence of farming and Sybil attacks has largely undermined the effectiveness of airdrops as a distribution mechanism.

MegaETH's response has been to offer multiple public sale opportunities. An initial Echo round sold 5% of token supply at the same terms as their private round, which included investors like Vitalik Buterin, Joe Lubin, and various Solana ecosystem figures. This was followed by the Fluffle NFT collection, which implemented anti-money laundering checks without KYC by analyzing wallet histories for connections to sanctioned entities.

The ICO Structure and Auction Mechanism

The current public sale uses an auction mechanism starting at $1 million FDV and capping at $999 million—just shy of the unicorn threshold. This cap was deliberately chosen as a signal that the team believes prices above this level would be unfair to participants.

"It's not up to Lei and I to decide what the valuation of mega should be," Muduroglu stated. "We had opportunities to raise in private rounds at VCs at very high valuations, but then we would fall victim to what I think is not our own success. We would end up enabling price discovery in primary markets compared to secondary markets."

The result is a public sale that makes community members the largest stakeholder category in the project. According to Muduroglu, the team holds "a little bit over 9% supply," VCs have 14%, and the public sale represents 15% of total supply. This distribution is notably more equitable than many recent token launches in the space.

An additional incentive structure offers a 10% discount to participants willing to accept a one-year lockup on their tokens. This mechanism serves two purposes: it provides a benefit to US accredited investors (who face mandatory lockup requirements anyway) and it identifies and rewards long-term aligned participants. "People who effectively have a vision of, they believe in a mega thesis, they want to get exposure to mega thesis and they don't look at this as a quick trade," Muduroglu explained.

Why Layer 2 Instead of Layer 1?

The question of why MegaETH chose to build as a Layer 2 rather than a standalone Layer 1—particularly given examples like Hyperliquid that have achieved success as more centralized Layer 1s—reveals the depth of the team's architectural thinking.

Muduroglu's response was direct: "Fundamentally it's because we're not basing our decisions on token valuation." He argued that while there may be a perceived premium for Layer 1 tokens, the Layer 2 architecture is strictly superior for achieving maximum performance while maintaining meaningful security properties.

"Mega cannot be as performant as a Layer 1," Muduroglu stated, inverting the usual assumption. "What's the point of being a Layer 1 that has three co-located validators? That does not have the best architecture for the trade-offs." The team believes that a highly performant Layer 2 settling onto Ethereum offers better guarantees than a centralized Layer 1 where "if team decides to rug, can rug."

There's also a competitive dynamics argument: "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 go and use a L2 that settles onto Ethereum and gives me security promises compared to an L1 that's fully centralized."

Regarding Hyperliquid specifically, Muduroglu noted a fundamental tension in their architecture: "I personally recommend that they continue to more and more decentralize validator set, but the more they decentralize validators the more they become less competitive. The more margin they lose on performance." Layer 2s avoid this trade-off by not requiring a distributed validator set for consensus.

Ethereum's Role and the Parasitic L2 Debate

The discussion addressed the ongoing debate about whether Layer 2s are "parasitic" to Ethereum by capturing transaction activity and economic value that might otherwise flow to the base layer. This debate has intensified as Ethereum's fee revenue has declined while Layer 2 activity has grown.

Muduroglu offered a provocative framing: "This idea that Ethereum will go and play someone else's game and win is really stupid. No offense." He argued that Ethereum should not try to compete on performance with chains like Solana or Monad—its competitive advantage lies in decentralization, and losing that would be "game over for ETH."

Instead, Muduroglu sees Ethereum's optimal role as becoming "the de facto settlement layer for the entire world." While acknowledging critics who question where the revenue comes from in this model, he argued that if the overall crypto market grows significantly, there will be sufficient demand for settlement services to make this valuable.

"What has to happen is these Layer 2s need to be designed in a way that they can't become Layer 1s," he cautioned. The real danger, in his view, is Layer 2s that don't truly leverage their architecture and could eventually vampire attack Ethereum's liquidity before transitioning to independent operation. MegaETH, with ETH as its native gas token and deep architectural dependence on Ethereum, is designed to avoid this outcome.

Real-Time Applications and New Design Spaces

The performance improvements MegaETH targets aren't merely incremental—they potentially enable entirely new categories of applications. Sub-10 millisecond block times and real-time price feeds create possibilities that don't exist on current blockchain infrastructure.

Muduroglu highlighted an application called Euphoria being built on MegaETH, which enables tap-based trading where users can speculate on price movements in real-time. Such applications require both low latency and on-chain price feeds that update continuously. The team announced a partnership with Chainlink to bring real-time price oracles to their chain.

"The answer is latency-sensitive applications," Muduroglu explained. "The difference between mega and other chains is that yes, it is L2, 100 percent, but every single block that is pushed, that block is law on that. It's as good as law." This combination of speed and finality enables user experiences impossible on chains with longer confirmation times.

The Abundance Mindset

Yang offered a compelling analogy for thinking about blockchain capacity and future demand. He cited a Steve Jobs presentation from 2000 where Jobs proudly announced the Power Mac G4 Cube with "standard 32 megabytes of RAM and a 1.5 gigabyte" hard drive. Today, Yang's computer has 32 gigabytes of RAM—and manages to use 28 of it.

"Back in 2000, if you ask a programmer, 'Hey, you're now given 32 gigabytes of RAM. What do you do with it?' You would say, 'Well, I don't know, maybe garbage data,'" Yang reflected. The lesson is that developers consistently find ways to use available resources in ways that couldn't have been predicted.

This "mindset of abundance" has implications beyond raw throughput. Yang pointed to gas optimization as a significant pain point for smart contract developers: "A big part of the pain for smart contract developers is this gas golfing activity, trying to squeeze out the last bit of gas from your contract. It's bug-inducing and at least it's labor-intensive."

Higher capacity enables developer productivity improvements: "If you don't have to worry about gas with higher TPS—also higher gas limit—maybe each person can just build two, three, four times more interesting apps." Yang compared current smart contract programming to assembly language programming in the 1960s, suggesting that we're still in the very early stages of what's possible.

Spiritual Alignment with Solana

The conversation highlighted interesting parallels between MegaETH and Solana's design philosophy. Both prioritize performance as a primary design goal, both embrace the reality that some centralization in block production enables better user experiences, and both believe that crypto's adoption depends on achieving web-scale performance.

Muduroglu explicitly acknowledged this connection: "The Solana community is awesome and you know, we have been inspired by them in a lot of ways. We're very much focused on applications. We're very much focused on products." The team has an incubator called "Mega Mafia" where they work directly with application teams for months at a time.

The philosophical alignment extends to how both communities think about trade-offs. Rather than treating decentralization as an absolute value to be maximized regardless of cost, both Solana and MegaETH adopt a more nuanced view that examines what properties actually matter for users and applications, then optimizes accordingly.

This doesn't mean the approaches are identical. Solana maintains a distributed validator set and operates its own consensus mechanism, while MegaETH delegates these responsibilities to Ethereum. But the underlying thesis—that blockchain performance matters enormously and that some architectural choices that look like "centralization" are actually the right trade-offs—is shared.

The Future of Blockchain Categories

Both founders suggested that the current taxonomy of "Layer 1" versus "Layer 2" may not persist as the relevant distinction. Instead, Muduroglu predicted that "four years from now, we're not going to be saying, oh, this is an L2, this is an L1. I think we're just going to more or less be saying, hey, this blockchain gives me this property with this trade-off."

This framing suggests a more sophisticated understanding of blockchain design spaces is emerging. Different applications have different requirements—billion-dollar DeFi positions may warrant the maximum decentralization of Ethereum Layer 1, while high-frequency trading applications need the sub-millisecond latency of something like MegaETH.

The market will ultimately decide which trade-offs are worth making for different use cases. "If there are no apps on mega that are good, there's no marginal differences, all forks between mega and any other chain, including L2s, including L1s, I don't understand why mega even exists," Muduroglu stated bluntly. "We failed. As a team, we failed."

Sequencer Decentralization Plans

While MegaETH embraces centralized block production for performance, they do plan to implement a form of decentralization through sequencer rotation. Instead of switching the active sequencer every block or few blocks (which would impose latency overhead), rotations might occur on longer timescales—perhaps hourly or every two hours.

"We can even create a schedule ahead of time that follows the peak activity around the world such that most of the users will have the lowest access latency to the sequencers," Yang explained. This approach optimizes for user experience while still providing accountability and censorship resistance.

The rotation mechanism includes the ability to skip or reject misbehaving sequencer candidates, providing "anti-censorship accountability" similar to traditional decentralized systems but optimized for the Layer 2 context. Yang characterized this as "having almost all the benefits of a decentralized sequencer but just more performance minded."

MegaETH's Position in the Competitive Landscape

The MegaETH team is explicitly positioning themselves at the extreme end of the performance-decentralization trade-off curve. This is a deliberate business strategy as much as a technical choice.

"It's easier to win if you focus on one thing," Yang argued. "If you can just focus on maximizing performance, then you are sure that you're going to capture the far end of performance-seeking apps. And it's just much easier to sell to them than go to an app and say, 'Hey, we are 70% performance, 30% decentralization, and 30% security.'"

This clarity of positioning makes MegaETH's value proposition simple to communicate: they are building for applications that need maximum performance and are willing to accept the Layer 2 trust model to get it. Applications with different requirements—those prioritizing maximum decentralization or requiring specific consensus guarantees—can use other platforms.

The Ethereum Settlement Layer Thesis

A key assumption underlying MegaETH's architecture is that Ethereum will remain valuable as a settlement layer even if most transaction activity migrates to Layer 2s. This is not universally accepted in the crypto community, with some arguing that a world of powerful Layer 2s leaves Ethereum as a relatively worthless "ghost chain."

The MegaETH team disagrees. "If we all believe that Ethereum and crypto and Solana and this entire market is going to 10x in size over the next six years, there is enough demand to be the world's settlement layer for it to be intrinsically valuable," Muduroglu argued.

Moreover, MegaETH is designed to reinforce rather than undermine Ethereum's position. ETH serves as the native gas token ("there's no need to—mega is not meant to be like, 'Oh yeah, we're going to try and fully abstract away ETH'"). The chain's name itself—"MegaETH"—signals the relationship. And the architectural dependencies mean that MegaETH cannot easily transition to becoming an independent Layer 1, avoiding the "vampire attack" scenario that concerns some Ethereum advocates.

Application Development Philosophy

The MegaETH team emphasizes that raw performance metrics ultimately matter only insofar as they enable better applications. This application-centric philosophy, which they note is shared with Solana, drives their development priorities.

The Mega Mafia incubator represents this commitment. Rather than simply providing infrastructure and hoping developers build interesting things, MegaETH works "many months, IRL with teams on trying to build cool apps." This hands-on approach reflects an understanding that winning the Layer 2 competition requires not just the best infrastructure but an ecosystem of compelling applications.

The real-time performance targets enable application categories that simply cannot exist on slower chains. The Euphoria example demonstrates this: tap-based trading games that feel responsive and immediate require the kind of sub-second finality that MegaETH targets. As Yang noted, blockchain games have historically struggled with the disconnect between in-game actions and blockchain confirmations—MegaETH's architecture eliminates this friction.

Critical Perspective on Current L2 Implementations

The MegaETH team believes existing Layer 2s have failed to fully exploit the potential of the architecture. "Existing Layer 2s have not fully, for lack of a better word, exploited the upside of being a Layer 2," Muduroglu stated. "The level of juice there is to squeeze being a Layer 2 while maintaining those exact same decentralization properties hasn't been fully achieved."

Their approach was to start from first principles rather than incrementally improving existing designs: "Let's not look at what people have done in the past. And let's not take any of the underlying existing assumptions of what a blockchain Layer 2 is meant to be like and what those decisions need to be. It's just rebuilding blockchain as the fastest, most performant possible execution environment."

This fresh perspective led to architectural choices that might seem unconventional but follow logically from the goal of maximum performance. Replacing core Ethereum data structures, implementing aggressive compilation strategies, and embracing extended sequencer leadership periods all serve this overarching objective.

The Broader Crypto Market Context

The MegaETH ICO occurs against a backdrop of renewed optimism in cryptocurrency markets. The over-subscription (reportedly 7x) suggests strong appetite for new token offerings, particularly for projects with clear technical differentiation.

The success of other recent ICOs, particularly through platforms like Echo, has helped establish public sales as a viable alternative to the high-FDV private round model that dominated recent years. MegaETH credits itself with helping to inspire this trend through their earlier Echo round, which sold out in three minutes with 80% of Echo users attempting to participate.

This market context matters because it suggests MegaETH is launching into a receptive environment. However, the team emphasizes that their choices aren't driven by market conditions but by conviction about the right way to build and distribute a blockchain project.

Implications for Solana and the Broader Ecosystem

While MegaETH positions itself as an Ethereum Layer 2, its design philosophy resonates with Solana's approach to blockchain architecture. Both projects reject the notion that decentralization must be maximized at all costs, instead optimizing for the properties that matter most to actual users and applications.

The emergence of MegaETH could be viewed as validation of Solana's core thesis—that blockchain performance matters enormously and that reasonable trade-offs in decentralization are worth making. If MegaETH succeeds in capturing significant market share on the basis of performance, it will further legitimize the design choices that Solana pioneered.

At the same time, MegaETH and Solana will likely compete for certain categories of applications, particularly those prioritizing raw performance. The ultimate winner may be determined by factors beyond pure technical capability: ecosystem maturity, developer tooling, liquidity, and network effects all play crucial roles.

Looking Forward

MegaETH represents an ambitious bet on the future of blockchain infrastructure. The team's willingness to make unconventional choices—aggressive centralization of block production, novel token distribution mechanisms, explicit positioning at the performance extreme of the design space—reflects a coherent vision of what crypto infrastructure should become.

Whether MegaETH succeeds will depend on execution and market reception. The technical claims are bold, and the real test will come when the mainnet launches and applications begin building. But the intellectual framework the team has articulated—that Layer 2s should fully exploit their architectural advantages, that performance enables new design spaces, and that blockchain competition will ultimately be about concrete properties rather than abstract categories—offers a compelling lens for understanding the evolving crypto infrastructure landscape.

As Yang put it, MegaETH aims to be "a genie up there" that can execute any computation correctly and make it accessible to anyone. Whether that genie can deliver on its promises will be one of the most interesting stories to watch in the Ethereum ecosystem over the coming months.

Facts + Figures

• MegaETH's ICO reached over $340 million committed at the maximum token price, demonstrating strong market demand for the project and robust animal spirits in the current crypto market.

• The auction mechanism starts at $1 million FDV and caps at $999 million, deliberately set below unicorn status as the team believes valuations above this level would be unfair to participants.

• 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.

• Token distribution allocates approximately 9% to the team, 14% to VCs, and 15% to public sales, making community members the largest stakeholder category.

• Network latency between the US and Turkey is approximately 150 milliseconds, illustrating the physical constraints that necessitate clustered block production for performance optimization.

• The initial Echo round sold 5% of token supply at the same terms as private investors, selling out in three minutes with 80% of Echo users attempting to participate.

• MegaETH uses ETH as its native gas token, reinforcing its relationship with Ethereum rather than attempting to compete with it.

• The team has partnered with Chainlink to bring real-time price feeds on-chain, enabling latency-sensitive applications like tap-based trading.

• Key technical optimizations include EVM parallelization, just-in-time compilation, and replacement of Ethereum's Merkle Patricia Trie with a custom data structure.

• A 10% discount is offered to participants who accept a one-year token lockup, identifying and rewarding long-term aligned investors.

• Private investors include Vitalik Buterin, Joe Lubin, Dragonfly, and several Solana ecosystem figures like Multicoin and Austin Federa.

• The Fluffle NFT collection implemented AML checks without KYC by analyzing wallet histories for connections to sanctioned entities.

• Sequencer rotation is planned on longer timescales (1-2 hours) rather than per-block, optimizing for global user latency while maintaining accountability.

• The MegaETH team operates an incubator called "Mega Mafia" where they work IRL with teams for months to develop applications.

Questions Answered

What is MegaETH and how is it different from other Layer 2s?

MegaETH is an Ethereum Layer 2 blockchain designed to maximize performance through centralized block production. Unlike existing Layer 2s that the team believes haven't fully exploited the architectural advantages of the L2 model, MegaETH starts from first principles to achieve sub-10 millisecond block times and 100,000 transactions per second. The project implements aggressive technical optimizations including EVM parallelization, just-in-time compilation, and replacement of Ethereum's Merkle Patricia Trie data structure. The team describes it as "the end game for blockchain performance scaling" because it pushes the L2 architecture to its theoretical limits while maintaining security guarantees through Ethereum settlement.

How does MegaETH inherit security from Ethereum?

MegaETH inherits security through a mechanism called derivation, where the sequencer publishes block hashes or complete block data to Ethereum Layer 1. When wallets, exchanges, or other clients want to determine the canonical state of MegaETH, they reconstruct the chain state from the data anchored on Ethereum rather than simply trusting the sequencer. Since Ethereum is considered the most decentralized blockchain and therefore least likely to experience reorgs, the derived Layer 2 state inherits this finality. For liveness guarantees, users can submit transactions directly to an inbox contract on Ethereum, which the derivation rules require the sequencer to include—creating a bypass mechanism against potential censorship.

Why did MegaETH choose to launch as a Layer 2 instead of a Layer 1?

The MegaETH team argues that Layer 2 architecture is strictly superior for achieving maximum performance while maintaining meaningful security properties. Co-founder Namik Muduroglu stated bluntly that "mega cannot be as performant as a Layer 1" because the L2 structure allows them to avoid trade-offs that constrain L1s. A centralized L1 with just a few validators lacks credible security guarantees—"if team decides to rug, can rug"—while a Layer 2 settling onto Ethereum provides those guarantees without requiring distributed consensus. The team also believes that if they don't build the ultimate performant L2, someone else will, and that architecture will win because it makes more sense for users and applications.

What is MegaETH's approach to token distribution?

MegaETH has pursued an unusually egalitarian token distribution model with multiple public sale opportunities. The team holds approximately 9% of supply, VCs have 14%, and public sales total 15%, making community members the largest stakeholder category. They've offered tokens through an initial Echo round (5% at the same terms as private investors), the Fluffle NFT collection (with AML but no KYC), and the current public auction. The auction starts at $1 million FDV and caps at $999 million, with the team explicitly declining to raise at higher private valuations to avoid enabling price discovery in primary markets rather than secondary markets.

What new applications does MegaETH enable?

MegaETH's extreme performance enables latency-sensitive applications that cannot exist on slower blockchains. A key example is Euphoria, a tap-based trading game where users can speculate on price movements in real-time. This requires both low latency and continuous on-chain price feeds—MegaETH has partnered with Chainlink to provide real-time price oracles. The team emphasizes that sub-10 millisecond block times combined with immediate finality ("every single block that is pushed, that block is law") creates user experiences impossible on chains with longer confirmation times. Additionally, the abundance of computational resources enables developers to build more complex applications without gas optimization constraints.

How will MegaETH handle decentralization?

MegaETH plans to implement sequencer rotation rather than distributed consensus, with rotations occurring on longer timescales of one to two hours rather than per-block. This approach maintains performance while providing accountability and censorship resistance. The rotation schedule can even be optimized to follow peak activity around the world, giving most users the lowest access latency. The mechanism includes the ability to skip or reject misbehaving sequencer candidates, providing "anti-censorship accountability" similar to traditional decentralized systems. Co-founder Lei Yang characterized this as "having almost all the benefits of a decentralized sequencer but just more performance minded."

Is the current demand for crypto applications sufficient to use MegaETH's capacity?

The MegaETH team argues that historical precedent suggests demand will grow to meet available capacity. Lei Yang cited Steve Jobs announcing 32 megabytes of RAM as standard in 2000, compared to 32 gigabytes common today—and noted that current operating systems manage to use nearly all of it. Back in 2000, programmers couldn't have predicted what they would do with 1,000x more memory. Similarly, current blockchain capacity constraints may be masking latent demand for applications that simply can't be built today. The team also argues that reducing gas costs enables developer productivity gains—eliminating "gas golfing" that is "bug-inducing and labor-intensive" could allow developers to build significantly more applications.

Are Layer 2s parasitic to Ethereum?

The MegaETH team rejects the framing that Layer 2s harm Ethereum. They argue that Ethereum's competitive advantage is being the most decentralized blockchain, and it shouldn't try to compete on performance with chains like Solana. Instead, Ethereum should become "the de facto settlement layer for the entire world." While critics question where the revenue comes from in this model, the team believes that if the crypto market grows significantly, there will be sufficient demand for settlement services. They do acknowledge that L2s should be designed in ways that prevent them from becoming independent L1s—MegaETH uses ETH as its gas token and has deep architectural dependencies on Ethereum specifically to reinforce rather than undermine the base layer.