🚦 Sentiment of the Day: 🟢 Cautious optimism. $ENA
The market responded well to MegaETH's proposal, which promises to revolutionize the financing logic of Layer 2 networks. The subsidized fee model via stablecoin aligns incentives and can attract strong institutional attention, but the challenge of execution at scale remains.
A MegaETH, Ethereum scaling solution developed by MegaLabs, announced the introduction of a new stablecoin called USDm. The difference is that, instead of charging margins from the sequencer like most Layer 2s, USDm will use the yield from reserves to fund the operational expenses of the sequencer.
This model aims to keep transaction fees low and stable, while aligning incentives between the network, users, and developers.
⚙️ Structure and operation
Traditionally, Layer 2 networks generate revenue by adding an extra fee on sequencer operations. According to MegaETH, this system can create tension with users and builders, especially after EIP-4844, which reduces data costs and makes margins more unpredictable.
USDm seeks to solve this problem: the yield from the stablecoin reserve will be programmatically directed to cover the operating costs of the sequencer. In other words, instead of serving as profit, the revenue finances the network's infrastructure.
The public test network was launched earlier this year and is already operational, featuring block times of 10 ms and a capacity of over 20,000 transactions per second.
💵 USDm on the tracks of Ethena
The first version of USDm will be issued on the tracks of USDtb from Ethena, ensuring institutional support and transparent accounting. The reserves of USDtb are primarily composed of tokenized assets from the BlackRock U.S. Treasury Fund (BUIDL) via Securitize, in addition to liquid stablecoins for redemptions.
At launch, USDm will be exchanged directly for USDtb, with no option for fiat redemption. The team did not disclose a target 'float' for daily expenses, stating that parameters will be gradually adjusted.
Ethena, issuer of the third largest stablecoin (USDe), reinforces the partnership by bringing scale and compliance. The protocol has about US$ 14 billion in TVL and ranks among the top 10 in DeFi. Its USDtb, backed by reserves, already totals approximately US$ 1.5 billion in circulation, with regulatory compliance prospects via the GENIUS Act in collaboration with Anchorage Digital Bank.
✨🔮✨ Outlook and next steps
Regarding additional sources of revenue, such as MEV, MegaETH reported that more details will be revealed closer to the launch on the mainnet. About alternatives like token buybacks, the team emphasized that the idea is 'good in principle', but premature without an official token.
They also emphasized that the direct distribution of yield to users is not viable under the GENIUS Act, making the funding of the sequencer's OPEX the first step. As the network matures, new forms of redistribution may be explored.✨
🌐 Network integration and performance
USDm will be integrated among wallets, paymasters, dapps, and on-chain services of MegaETH. Other stablecoins already active on the network, such as USDT0 (canonical version of USDT) and cUSD, will remain available for users and developers.
MegaETH presents itself as a real-time blockchain protected by Ethereum, with heterogeneous and hyper-optimized execution. The goal is to achieve latency of 10 milliseconds and process up to 100,000 transactions per second, keeping fees below one cent.
This performance, according to the team, could open up space for entire categories of streaming and interactive applications, which are currently not viable on Ethereum.
In December, MegaETH raised💵 US$ 10 million in just three minutes via the Echo platform, founded by trader and influencer Jordan Fish, known as Cobie.
🦾 The proposal of MegaETH with USDm is bold: to replace the logic of margins and profits with a sustainable, transparent, and user-oriented model. If successful, it could redefine how layer 2 blockchains finance their operation and attract developers.
