Technical glitch forces MegaETH to scrap $1B raise

The pre-deposit event by MegaETH failed on Tuesday due to technical issues that affected the system simultaneously. These problems caused payments to break, users to get stuck, and new deposits to rush in, pushing the raise far above the limit.

MegaETH posted an article on X stating that the event failed due to incorrect setup, incorrect rate limits, and someone opening the Safe transaction too early.

Technical problems hit MegaETH’s pre-deposit system

MegaETH stated that the pre-deposit event was intended to enable verified users to purchase MEGA tokens before the main public launch, thereby avoiding confusion or unfair advantage. However, the event quickly encountered issues due to setup mistakes that made it difficult for users to deposit, caused delays, and pushed the raise far above the planned limits.

For the pre-deposit to work, the MegaETH website, smart contract, and the Sonar service run by Echo had to be flawless; however, each part of the system reported errors simultaneously, causing a chain reaction of problems. Users at the event became frustrated, and the entire program failed in ways that MegaETH had not planned. 

The first problem occurred as soon as the sale opened because the smart contract contained the wrong SaleUUID. MegaETH has to run a multisig transaction to correct the mistake, but it took a while because four out of six signers had to approve it before the system could start working again. And while all this was happening, no deposits could go through, so users became even more stressed.

After fixing the SaleUUID, MegaETH had to focus on the rate limit in the Sonar system that was blocking normal user requests because it considered them spam. People were unable to deposit for more than 20 minutes while the technical team worked to identify and resolve the issue. 

However, once the system started working again, the support team at MegaETH set the pre-deposit to open randomly to make the process fair; however, they did not anticipate the unfairness that followed. The random opening favored users who repeatedly refreshed the page, allowing them to deposit first. 

Those who got a head start quickly filled the $250 million cap almost instantly, long before the others even realized the sale was live again. People waiting their turn were confused, frustrated, and enraged because the system, which was supposed to be fair, turned out to be quite the opposite. 

Early Safe execution pushes deposits far beyond the planned limits

MegaETH aimed to raise the limit to $1 billion within the next hour, after the $250 million cap was filled almost immediately, to ensure a fair sale continued. The team gathered all the required Safe multisig signatures in advance to execute the translation and hit the cap at the right moment. But things didn’t really go as planned. 

The system has a rule that allows anyone to execute a fully signed Safe transaction once it has enough signatures. One team member misunderstood this rule and ran the transaction early, long before the team had initially planned. The results were catastrophic because the deposit system opened to users once more, but this time much sooner than the team expected. Many deposits came in, and no one had control over them, so this overwhelmed the system.

MegaETH tried to lower the cap to $400 million to slow down the rush of deposits, but the deposits had already surpassed that amount by the time the blockchain confirmed this change. The situation grew increasingly chaotic as more users continued to submit deposits at a rapid rate, prompting the team to raise the cap to $500 million. This move successfully froze new deposits, allowing them to manage the situation. 

This $500 million cap also filled up immediately, and MegaETH had to cancel the planned expansion to $1 billion to protect fairness, prevent confusion, and ensure the pre-deposit remained safe and honest. The company promised to release a withdrawal page soon to help users affected by unfairness, so that anyone who deposited under false assumptions could get their money back. 

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