What is MEGA ETH? Layer 2 solution to replace Ethereum?
MegaETH is a Layer 2 built on Ethereum to make Ethereum faster and do more. Building MegaETH is like adding a highway to the Ethereum network.
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3/30/20255 min read


What is Mega ETH?
MegaETH is a Layer 2 built on Ethereum to make Ethereum faster and more capable. Building MegaETH is like adding a highway to the Ethereum network, MegaETH helps people experience super fast transactions (over 100,000 times per second) and almost no waiting.
MegaETH is special because it wants to make Ethereum like normal applications on the internet, so you can play games, trade money, or do many other things without slowing down. It's incredibly fast, cheaper, and more secure when MegaETH runs on Ethereum.
*In short, MegaETH = Make ETH Great Again.


Why was MEGA ETH born?
MegaETH was created to address the persistent scalability and performance challenges faced by Ethereum and other blockchain networks, especially for decentralized applications (dApps) that require high-speed, real-time processing.
Ethereum, despite its groundbreaking ability to support smart contracts and dapps, has long faced limitations such as slow transaction speeds, high gas fees, and network congestion during periods of high demand. These issues hinder its ability to support complex, transaction-heavy applications, competitive gaming, or complex DeFi protocols that require fast responses like Web2 systems while still maintaining the decentralization and security that Ethereum is known for.
The creators of MegaETH, developed by MegaLabs, recognize that current Layer 1 (L1) and Layer 2 (L2) solutions have not fully bridged the gap between blockchain technology and the high-speed performance standards of traditional centralized systems. Most blockchains, including Ethereum and its scaling solutions, have to make trade-offs between decentralization and security or performance, often resulting in modest throughput, long block times, or limited computing power.
MegaETH appears to overcome these limitations by introducing a blockchain capable of processing over 100,000 transactions per second (TPS) with sub-millisecond latency, creating what it calls the “first real-time blockchain.”


How does MEGA ETH work?
MegaETH is a scaling architecture on Ethereum, using EigenDA for data management, Active Sequencer for transaction ordering, and a network of Full Nodes for state updates. Here is how the protocol works:
User Submits Transaction : MegaETH user submits transaction request from their wallet.
These transactions are aggregated and broadcast across a network of Full Nodes.
Initial Transaction Processing by Full Nodes : The first Full Nodes in the network receive transactions, serve RPC requests, and propagate them.
Data Storage on EigenDA : EigenDA, a decentralized data storage system, receives transactions as “chunks” and aggregates them into “blobs”. A Contract Manager and Operator Registry on Ethereum L1 ensure the validity of data on EigenDA.
Active Sequencer processes transactions: Ordering - Active Sequencer orders transactions in order. Execution - Active Sequencer processes these transactions and packages them into a blob.
Validation via Provers Network Active Sequencer sends sorted blocks to the Provers Network. The “Provers” verify and provide proof of the block’s validity.
Updating state on Full Node network : Full Nodes receive state diffs from Sequencer and update local state. Full Nodes communicate with each other using p2p protocol to ensure synchronization.
Finalize and send data back to Ethereum L1: MegaETH Inbox Contract on Ethereum L1 receives “blob ID” containing transaction information for long-term storage.


A simple summary of how MEGA ETH works:
You send money ➟ The courier receives the information ➟ The information is stored in a large warehouse ➟ The manager sorts the transaction ➟ The person checks if it is correct ➟ Updates everyone's amount ➟ Records it in the ledger for long-term storage.
How is Layer 2 MEGA ETH different from other L2s?
The Ethereum ecosystem is witnessing a rapid proliferation of Layer 2 solutions, and this has sometimes raised concerns about “inflation” of both L2 projects and the ETH supply itself, reducing the effectiveness of the fee burning mechanism (EIP-1559) on ETH. However, to understand how MegaETH differs from other L2s, we need to look at its goals and design.
MegaETH is not just a regular L2 focused on offloading Ethereum by handling transactions off-chain like popular rollup solutions (Optimism, Arbitrum). It is built with the goal of being the “first real-time blockchain”, aiming for superior performance: over 100,000 transactions per second (TPS) and sub-millisecond latency. MEGA ETH will achieve this by:


Node Specialization: MegaETH divides tasks between different types of nodes (sequencer, prover, full node), optimizing performance. Sequencer focuses on fast transaction processing, while other nodes ensure decentralized confirmation and security, leveraging Ethereum Layer 1 as a secure foundation.
Hyper-Optimized EVM: Unlike many other L2s that rely solely on rollups to compress transactions, MegaETH improves the EVM execution environment to achieve speeds close to hardware limits, supporting complex applications such as games or high-frequency trading.
No real block gas limit: MegaETH almost completely eliminates traditional block gas limits, allowing for large transaction volumes to be processed without congestion, something other L2s often struggle with.
The ETH “Inflation” Problem and Ethereum’s Burn Mechanism
MegaETH does not directly change this mechanism on Layer 1, as it still relies on Ethereum for security and final settlement. However, by moving the majority of transactions to L2 with lower fees, it can reduce the pressure on gas fees on Layer 1, which indirectly affects the amount of ETH burned.
The key difference is that MegaETH does not only focus on reducing costs or increasing throughput like other L2s, but also aims to deliver a real-time experience that competes with Web2 performance.
In short, MEGA ETH is an overpass built on ETH road to reduce traffic, without directly affecting the ETH network.
MEGA ETH Funding Rounds
Currently, MEGA ETH has raised a total of $30 million in funding through two rounds.
In their Seed round, they raised $20 million from major investors such as DragonFly Capital, Robot Ventures and gained backing from big names such as Vitalik Buterin, Hasu, Cobie and other investors.
In round 2 they chose to raise funds through a public sale on the ECHO platform. MegaETH raised $10 million in 3 minutes through the echo investment platform, making it the largest capital raise the platform has ever seen.
Instead of following the traditional path of raising capital from institutions and venture capitalists at high valuations like most projects, MegaETH has completely flipped the previous script:
They allow the community to participate with the same value as VC
Structure it as equity warrants + tokens for long term bonding
This makes MegaETH’s community round different because anyone can participate in early investment. This shows that the GTM model in crypto is changing, projects that know how to create consensus and encourage the community to grow together will have an advantage.Through the Echo round, MegaETH attracted 3,200 new investors who are motivated to build, support and spread their protocol.
Evaluation and Conclusion
MegaLabs develops MegaETH, a blockchain capable of processing up to 100,000 transactions per second (TPS) while remaining fully compatible with Ethereum. MegaETH achieves real-time processing speed and high transaction throughput thanks to its heterogeneous blockchain architecture and highly optimized EVM execution environment.
This structure allows for dedicated assignment to network nodes, while minimizing hardware requirements for full nodes, ensuring a fast, secure, and efficient blockchain system.
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Data from: Whitepaper
Data by HCCVenture
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