But the launch was very lackluster. After four days of launch, the TVL on the chain is only ~$60M. That ranks MegaETH 40th among different chains, below chains like Ton, Cardano, and even PulseChain.
The team even postponed their token generation event. Well... technically, they didn't "just" postpone it forward. They tied the TGE to specific KPI metrics that the ecosystem has to meet.
Here are the simplified versions of three KPIs that the ecosystem has to meet
Reach the $500M supply of USDM.
At least one app must generate $50K+ in daily fees for 30 consecutive days.
10 Mafia apps are fully deployed, as defined by Verified contracts, Functioning core loop, and Publicly accessible front-end.
You can track the progress of these KPI via either of these two dashboards: option one & option two. Once they reach any KPI, after seven days, they'll launch the $MEGA token.
I expect the ecosystem to reach the goal within weeks.
$MEGA TGE KPIs tracker
Why was the MegaETH launch so underwhelming? Especially compared to the hype it generated?
#1. Market conditions.
I'm gonna be honest here. It's a bloodbath out there. Nobody wants to use crypto. Even fewer want to play around with new experimental apps.
I've covered the market in the past newsletters. So, I won't go into more detail here.
Anyways, many people expected MegaETH to save the crypto market. That didn't happen. The market just brought down the chain to its level.
#2. No Novel Apps
The main appeal of the MegaETH ecosystem was the many novel apps that it promised.
Some of those novel applications, like Noise for mindshare trading and GTE for order-book DEXes seems to have already left the ecosystem.
Even the apps that stayed, many haven't launched. They promised tap sharing from Euphoria, Redistribution Markets from Rocket, but they are not live yet.
#3. No incentivized TVL.
All other launches had points programs and other incentives at both the chain & app level to attract maximum liquidity. There was none of it in the MegaETH launch.
Is this good or bad? Depends on who you are asking. But ultimately, I agree with Vitalik's take on incentivized activity. He said:
Incentives that compensate for unavoidable temporary costs that come from your thing being immature are good.
Incentives that bring in totally new classes of users that would not use even a mature version of your thing without those incentives are bad.
Overall, what do I think? The launch was definitely underwhelming.
Not leveraging the launch event to the maximum was a loss. But I'm not sure how much MegaETH could've changed.
They cannot fix the market by themselves. Should they have postponed for better conditions? I don't think so. Should they have at least coordinated with ecosystem apps to make sure there were many projects to experiment with? Yeah. That might've been better. But without the full context of app development, it's hard to judge.
The ecosystem not using incentives to attract liquidity is something I can respect as well. Now, their TGE event should be enough to attract the next wave of attention.
I'm still bullish on the ecosystem. But instead of a single big event, it'll be gradual growth.
You can visit this Rabbithole to find good apps on the MegaETH ecosystem.
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And even if the price retraced quite a bit, that's a big pump. Especially since the chart isn't related to any memecoin or AI Agent.
The chart is tracking $ZRO, the token of LayerZero, an interoperability protocol.
What happened? They announced a new L1 called Zero. It was the catalyst that drove the massive pump on $ZRO.
It has tech superpowers like zk and many great partners, including Citadel Securities, The Depository Trust & Clearing Corporation (DTCC), Intercontinental Exchange (ICE, parent of the New York Stock Exchange), and Google Cloud.
I won't bore you with technical details, but they're promising the Holy Grail of blockchains.
2 Million TPS per zone (sorta like rollups of ETH). Remember, even MegaETH is only targeting 100k TPS.
Ultimately, it got attention due to the many tech solutions it presented to hard blockchain engineering problems. You can read about it here.
The image below should be enough to get an intuition for the architecture of the chain for now.
Source: @LayerZero
The reactions to the announcement were mixed. Many people reacted positively. And it was a main reason for the $ZRO token to pump.
But it also attracted a lot of criticism.
Firstly, they dunked on both Ethereum and Solana on their blogpost. So, both communities had negative reactions to the chain.
Against Ethereum, LayerZero said the promise of L2s to fully inherit the L1 security is a lie. And presents Zero as a candidate against that lie. ETH Maxis were obviously, at least to their minds, enraged at this misrepresentation.
They also accused Zero of copying Ethereum's endgame design. While there are notable commonalities like differentiation between block builders and validators, there are differences as well.
Solana had a similar reaction and was criticized for centralization by LayerZero. Toly, the founder of Solana, implied that claims and metrics by Zero are overhyped and misleading.
Many others have made accusations of Technical Misrepresentation. I haven't spent time evaluating if these technical accusations have merit or not, so I can't say anything for now.
If you want a list of criticisms, check out this post.
What do I think? We don't need more chains.
But still, they're promising great tech and partners. If they can deliver, it's very impressive.
They're NOT launching a new token for the chain either. So, it's very bullish $ZRO.
But there's a lot of unlocks coming. Within a year, $ZRO will almost double its supply. If such massive unlocks made investors worry if this is another vaporware to make investors exit liquidity, we can't really blame them.
Now, even if Zero had the best tech, that won't be enough. Blockchain isn't just a tech product. It's also a product of network effects of various types: devs, users, liquidity, and app ecosystem. This chain is very weak there.
At the end of the day, it was just a short-term trade for many people. Zero launch is months away. We'll see how it performs then.
🚀 DeFi Catalysts
Lighter introduced a new feature: Funding Rate Rebates. They're using revenue from a new deal with Circle, the USDC issuer.
Aave proposed the Aave Will Win Framework. It'll direct 100% of product revenue to the Aave DAO treasury under a token-centric model.
Uniswap announced a collaboration with Securitize to make BlackRock's BUIDL available to trade via UniswapX.
Sui Network launched its own stablecoin, suiUSDe. It's powered by Ethena, the issuer of USDe.
Pump.fun introduced GitHub Creator Fee sharing. Users can now allocate Creator Fees to any GitHub account through its mobile app.
Lighter launched the Trading Account Types. It unifies spot and perp USDC balances under a single collateral framework.
Optimism is integrating ZK more deeply into the OP Stack. It'll allow them to move away from the 7-day requirement for finality.
Aztec has launched its $AZTEC token. The token performance after the launch was disappointing and went below the sale price.
Ondo Finance has added DeFi lending for SPYon and QQQon using a partnership with Morpho and Guandlet.
Risechain has partnered with Yearn to manage the "Autoyield" Vault on the chain. It generates yield for deposits on RiseX, their perp platform.
Ondo has received EU regulatory approval to list the first round of Ondo tokenized stocks & ETFs.
📰 Industry News
Robinhood launched the public testnet for its L2 chain. It's an Arbitrum-based L2 chain on Ethereum that promises tokenized stocks and more.
Pudgy Penguins introduced the Pengu Card. It's a Visa card built in collaboration with KAST. It removes the need for offramping.
BlockFills, a Chicago-based institutional crypto lender, has suspended client deposits and withdrawals. It's a bit worrisome.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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