Author: Frank, PANews
In the past few days, the cryptocurrency community, which loves to 'watch the show', has been hotly discussing a 'breakup' announcement. The decentralized exchange GTE (Global Token Exchange) officially announced its separation from its underlying L2 network MegaETH and may launch its own mainnet. This sudden change has sparked widespread discussion and speculation within the community.
Some believe this is a 'team infighting' caused by differences in ideology or conflicts of interest, while others keenly point out that this may be a well-considered strategic bet by top venture capital firm Paradigm in the L2 sector.
Behind this 'breakup', is it a rupture of partnership or a strategic shift driven by capital? When the 'killer application' and 'high-performance public chain' that once seemed like a perfect match part ways, where will their respective futures lead?
At the beginning of symbiosis - a 'high-performance' narrative that seemed like a match made in heaven
To understand the drama of this breakup, we may need to first explore why GTE and MegaETH were deeply bound together in the beginning, as well as the 'high-performance' narrative they jointly constructed.
At its inception, GTE had a vision similar to Hyperliquid: to provide trading speeds and experiences comparable to top centralized exchanges like Binance and Coinbase while retaining the core characteristics of decentralized non-custodial platforms. To achieve this goal, GTE adopted a centralized limit order book (CLOB) model commonly seen in traditional financial markets to address the pain points of high latency, high slippage, and high trading costs that are prevalent among traditional DEXs.
Supporting this ambition is a team from prestigious backgrounds. According to official sources, its core members come from global top financial and technology giants like Citadel, Nasdaq, Google, Jump, and Palantir.
For the GTE team, in order to achieve the aforementioned experience, it must be built on a high-performance public chain, and most existing public chains seem to struggle to support such goals.
MegaETH is a Layer 2 solution designed for extreme performance on Ethereum. It uses Optimistic Rollup technology with the aim of pushing the performance of the EVM to the hardware limits. MegaETH publicly claims that its network can achieve a throughput of up to 100,000 TPS and sub-millisecond latency, far exceeding all mainstream blockchains at the time. To achieve this goal, MegaETH adopts an innovative architecture that includes centralized sequencing and parallel processing, specifically serving applications that require high real-time performance, such as high-frequency trading and fully on-chain games.
In June 2024, its developing company MegaLabs completed a $20 million seed round led by Dragonfly, with participation from industry giants like Ethereum founder Vitalik Buterin and Consensys founder Joseph Lubin.
In the initial promotion, the relationship between GTE and MegaETH was deeply bound, with GTE being described as a project incubated by the MegaETH lab, specifically and exclusively built on MegaETH. GTE's co-founder Enzo Coglitore publicly stated that given GTE's extreme requirements for infrastructure, 'MegaETH is the only blockchain that can provide the required performance.'
This bundling strategy of 'revolutionary applications needing revolutionary public chains' has been very successful. By the end of 2024 and early 2025, MegaETH and GTE each secured $10 million in funding. On March 21, 2025, the MegaETH public testnet officially launched, demonstrating a performance of 20,000 TPS. GTE, as the first important application on it, attracted a large number of users and attention, validating the feasibility of MegaETH's high-performance narrative.
Behind the divergence may be Paradigm's renewed bet.
In May 2025, MegaETH's official X account was attacked by hackers, leading many users to mistakenly click on scam links. During this process, GTE's testing was in full swing, with the official stating that it achieved the goal of over 1 million users on the testnet in the past three to four months.
In addition, GTE's excellent performance also made it popular in the capital markets. In June 2025, Paradigm exclusively led GTE's $15 million Series A financing. The injection of this capital raised GTE's total financing to over $25 million, completely changing GTE's strategic position. It jumped from a project relying on MegaETH for incubation to a well-funded independent entity with full strategic autonomy. Just two months later, GTE officially announced its separation from MegaETH, establishing its own path.
However, this breakup seems a bit awkward. GTE's official media account stated: 'GTE has grown and is now separating from Mega Mafia.' Many believe this is a statement of abandoning a burden. Some even commented on Twitter that this is an 'application that doesn't exist, leaving a chain that doesn't exist,' implying that most so-called users are bots.
Of course, the main reason for this may come from GTE's recent financing partner - Paradigm. As a star investor in the crypto field, Paradigm has created several brilliant achievements in the past, such as Uniswap, dYdX, and Coinbase. However, in the last year or two, Paradigm's investment vision seems to have encountered issues, especially during the rise and fall of Blur and Blast.
As a project that Paradigm has heavily bet on in the past two years, Blast rapidly rose with its innovative native yield model, breaking through $2.7 billion in TVL within just six months. However, this popularity did not last. Due to user dissatisfaction with the token airdrop mechanism and frequent security incidents within the ecosystem, Blast's ecosystem quickly deteriorated. By July 2025, its TVL plummeted 96% from a peak of $2.7 billion to about $10.5 million, and daily active users dropped sharply from 180,000 to less than 4,000. Its token price also collapsed, with a nearly 90% drop.
As a major investor in Blast, Paradigm undoubtedly learned a profound lesson: deeply binding a promising application with a single L2 that has not been fully validated by the market carries significant systemic risks. The success or failure of the L2 infrastructure could become a 'single point of failure' for the entire investment portfolio.
Therefore, the most rational investment decision is not just to invest in GTE, but to invest enough funds to enable it to gain the ability to break free from reliance on a single infrastructure. This shifts Paradigm's bet from the uncertain question of 'can L2 succeed?' to a more certain question of 'can the elite application team succeed?'. Furthermore, if it builds its own chain after independence, the project's valuation would rise from a single DApp to a public chain level, which would have a positive effect on its valuation after TGE.
However, Paradigm has more considerations in this investment. Besides GTE, Paradigm also led a $225 million financing round for the high-performance L1 public chain Monad (a direct competitor to MegaETH). Now, as GTE and MegaETH cut ties, it is also possible that they will turn to Monad in the future. The deep binding between these two hotter projects in the market may achieve effects similar to Hyperliquid. With this layout, no matter whether L1, L2, or self-built chain applications emerge victorious in the end, Paradigm will remain undefeated.
After the sudden split, can they each find peace?
Thus, the separation of GTE and MegaETH is not simply a matter of 'team infighting', but very likely a capital-driven, rational business decision. As for MegaETH's development, given the current situation, it is indeed lackluster. Its related data cannot be found on mainstream data platforms and specialized Ethereum L2 ecological data platforms. Coupled with three months of silence and GTE's departure, the difficulty of future development has increased. However, there are still several projects within the MegaETH ecosystem, such as Biomes, Noise, and Euphoria, and whether they can support the emergence of the next star project through the 'MegaMafia' developer accelerator program will be a key focus.
For GTE, the breakup may not be the perfect choice. Within the community, there are many doubts about its true activity level, with some users sarcastically pointing out that most of GTE's 1 million test users are bots. Moreover, for GTE, whether self-building a public chain or relying on another public chain will delay the official launch of its product. At that time, on one hand, it will face uncertainties of a new ecosystem, and on the other, it must confront whether its product can retain enough users.
The separation of GTE and MegaETH is a microcosm of the complex relationship evolution among capital, applications, and infrastructure in the Web3 world. It marks a shift in venture capital strategy from simply supporting underlying protocols to empowering top applications. This 'fat application' theory, propelled by capital, will have a profound impact on the entire public chain landscape.
Perhaps this great separation has no absolute winners or losers; it is just another footnote in the continuous evolution and survival of the fittest in the crypto world.
