Layer-2 MegaETH is becoming the focal point in the crypto community after announcing plans to raise 10,000 ETH (~28 million USD) through the NFT collection The Fluffle. However, instead of receiving support, the project has faced numerous controversies, even being criticized for 'milking' the community.

MegaETH Launches The Fluffle NFT – Open for Sale to Raise More Capital

On February 5, #MegaETH announced the NFT collection The Fluffle, consisting of 10,000 soulbound NFTs (non-tradable NFTs), priced at 1 ETH each. This means that if sold out, the project will raise nearly 28 million USD.

The Fluffle is not just a simple NFT collection; it also represents at least 5% ownership in the MegaETH network, equivalent to 5% of the total token supply to be released. Notably, this NFT has an evolution mechanism, allowing users to level up based on their activity level; the more they participate, the more rewards they receive.

NFTs will be released in two rounds:

  • Retroactive Mint (first 5,000 NFTs): For individuals with significant contributions in the crypto industry, with over 80,000 addresses selected to participate.

  • Proactive Mint (remaining 5,000 NFTs): For those who have a positive impact on the MegaETH ecosystem, especially members of the Mega Mafia communities and users with high social media engagement.

MegaETH asserts that they want to find individuals who are truly committed to crypto, rather than those who participate just to profit from airdrops. Particularly, the project team does not own any NFTs to ensure transparency and eliminate conflicts of interest.

Criticized for 'Milking' the Community

Immediately after the information was announced, MegaETH faced a strong backlash from the community. If all 10,000 NFTs are sold, the project will raise nearly 28 million USD, while previously they had raised 30 million USD through two funding rounds. This raises the question: Does MegaETH really need more money?

Several prominent figures in the crypto community have spoken out against:

  • wab.eth argues that The Fluffle is essentially just an ICO disguised as NFTs. The project is selling 5% of the tokens at the same valuation as previous funding rounds, with nothing different except for the format.

  • LUNO (@lunolaser) bluntly calls MegaETH 'MegaEXTRACT', implying that the project is just 'sucking blood' from the community without actually contributing to the Ethereum ecosystem.

  • 曾嘉俊 (zjj.eth) requests MegaETH to allocate a portion of the profits to buy back and burn ETH; otherwise, this is just a quick money-making scheme.

Even the founder of Minted, Ali (@0itsali0), initially criticized MegaETH for being too greedy in continuous fundraising. However, just a few hours later, Ali deleted the post and changed his tone, even confirming he would mint a maximum of 3 #NFT​ from the whitelist. This led the community to question whether any 'insider information' caused Ali to change his perspective.

Is MegaETH Part of Ethereum's Plan?

Some speculate that MegaETH could be part of a larger strategy of Ethereum, especially since the project previously received investments from Vitalik Buterin and Consensys CEO Joseph Lubin.

This becomes more noteworthy as the Ethereum Foundation has recently been criticized for selling ETH to cover costs, putting pressure on the price. To address this issue, Vitalik Buterin has committed to a major overhaul, including staking ETH and injecting 50,000 ETH into DeFi to optimize capital.

Thus, there are opinions suggesting that MegaETH not only serves its own interests but also has close ties with Ethereum.

On the contrary, some believe that selling NFTs to raise funds could create a fairer opportunity. In 2023-2024, airdrop projects were 'manipulated' by a points model, where only those with high scores received rewards, leaving many small players without opportunities.

MegaETH is About to Launch Testnet

Despite the controversies, MegaETH is continuing its development plans. The project team recently confirmed that the testnet for MegaETH will be launched this February.

Is MegaETH really a potential #Layer2 or just a project taking advantage of Ethereum's reputation to raise funds? The crypto community is still waiting for answers.