MegaETH Valuation Game: Is it a Good Time to Get on Board or is Risk Approaching?

Original author: KarenZ, Foresight News

MegaETH has become a focal project in the crypto market with its technological breakthroughs in “real-time blockchain” and the ecological concept built together with the community.

As the Ethereum ecosystem continues to struggle with performance bottlenecks, MegaETH reshapes the imagination boundaries of the Layer 2 track with its technical declaration of “100,000 TPS + millisecond latency.”

From the early seed round investment by Vitalik, to the flash fundraising by the Echo community, and to the NFT sales earlier this year, every step of MegaETH has been stirring the nerves of the market.

Now, this project backed by Vitalik Buterin is about to launch its public sale on the Sonar platform. Is this a rare entry opportunity for ordinary investors? Or is it the last leg of risk accumulation?

This article will analyze the financing context, valuation logic, core value, and potential risks.

MegaETH Financing Journey: From VC, Vitalik's Endorsement to Community Co-Building

As an Ethereum L2 project committed to realizing “real-time blockchain,” MegaETH's fundraising journey demonstrates an evolutionary trajectory from VC financing to community-driven sales.

In June 2024, MegaETH announced the completion of a $20 million seed round financing, with Dragonfly as the lead investor, and participants including institutions such as Figment Capital, Robot Ventures, and Big Brain Holdings. Angel investors include Vitalik Buterin, Joseph Lubin (founder and CEO of ConsenSys), Sreeram Kannan (founder and CEO of EigenLayer), Kartik Talwar (co-founder of ETHGlobal), Mert Mumtaz (co-founder and CEO of Helius Labs), Hasu, and Jordan Fish (also known as Cobie).

By December 2024, MegaETH raised $10 million in less than three minutes through Cobie's Echo platform, far exceeding the target of $4.2 million. This round of financing attracted around 3,200 investors from 94 countries, with an average investment amount of $3,140 per investor.

At that time, Shuyao Kong, co-founder of MegaETH, told The Block that the seed round and Echo round financing used a structure of equity plus token warrants, with both rounds valued at “nine figures”, which means the FDV is at least 100 million dollars.

To the community's surprise, in February this year, MegaETH launched the “The Fluffle” series of NFTs for innovative financing, further expanding its community base. This series consists of 10,000 NFTs, all of which are non-transferable SBTs (Soulbound Tokens), and are sold in a whitelist format, with a whitelist price of 1 ETH. Holders will collectively receive at least 5% of the token allocation rights in the future, with 50% unlocked on the day of TGE and the remaining gradually unlocked over 6 months.

The current round of NFT issuance is divided into 2 phases. The first phase (5000 pieces) is the retrospective phase, aimed at those who actively participate in the Crypto industry (from supporting key protocols to individuals guiding local communities). A small portion is also allocated to influential early believers in the MegaETH community and various strategic partners, some of which are distributed in the form of free minting. One week after the launch, MegaETH announced the completion of the first phase of NFT issuance.

According to the previous plan of MegaETH, the second phase of NFT will be discovered a few months after the first phase NFT is issued, aiming to provide similar participation opportunities for users who continuously drive impactful social and on-chain interactions for MegaETH. The difference in this round is that quotas will be allocated to the MegaETH flagship accelerator program “Mega Mafia”. Each team will receive a portion of the quota to distribute to their respective communities. A small portion of the quota in this round will be reserved for ordinary users through social media analysis.

According to the MegaETH website, the latest community sale is open to all users who have successfully completed identity verification on the Sonar platform, and will use USDT on the Ethereum mainnet as the payment method. It may adopt an English auction format and set a fixed maximum price. Choosing a 1-year lock-up period can enjoy a 10% discount on the final token price. All participants from the United States must lock up.

Valuation logic: historical pricing, market expectations, and core value

The valuation evolution and financing history of MegaETH are closely linked to market expectations, technological advancements, distribution mechanisms, and the ecosystem.

Historical financing valuation: the rise from 100 million to 540 million USD

As mentioned earlier, the FDV of MegaETH in the $20 million seed round financing in June 2024 and the $10 million Echo round financing in December 2024 is both in nine digits.

In the first phase of NFT issuance in February this year, according to a screenshot released by OpenSea's Chief Marketing Officer Adam Hollander, MegaETH raised 4,964 ETH in the public fundraising of the first phase, which was worth 13.29 million dollars at that time.

According to my calculations, this 13.29 million USD represents at least 2.5% of the token allocation rights. It can be deduced that, based on the NFT fundraising situation, the FDV of MegaETH at that time was around 540 million USD.

Polymarket market prediction: 86% probability of hitting $2 billion FDV

In the Polymarket prediction market regarding “MegaETH's FDV on the first day of launch”, the probability of betting that the FDV will exceed 2 billion dollars is 86%, the probability of betting that the FDV will exceed 4 billion dollars is 57%, and the probability of betting that it will exceed 6 billion dollars is 21%.

This means that if the MegaETH FDV reaches 2 billion USD, the return multiple for the first batch of NFT holders will be 3.7 times (calculated in USD), while the profit potential for seed round and Echo round participants will be even more significant.

Platform Effect Enhancement: The “Profit Effect” of the First Phase Project of Sonar

The Sonar platform (under Echo, founded by Cobie), where this community sale takes place, comes with a traffic halo. Its first fundraising project, Plasma, performed remarkably—on the fourth day after TGE, it peaked at 34 times the sale price ($0.05) and is currently maintaining a 9-fold increase. This platform effect has further raised market expectations for the valuation of MegaETH.

Core values: the triple moat of technology, mechanism, and ecology

MegaETH can continuously gain capital and community favor due to its differentiated competitiveness in technological innovation, distribution mechanisms, and ecological construction.

In terms of technology, MegaETH addresses common issues in existing L2 such as second-level latency and insufficient throughput by optimizing the execution environment and node architecture, significantly enhancing the scalability of Ethereum while maintaining full compatibility with EVM, directly targeting the core needs of high-frequency trading, real-time chain games, and other Web 3 applications.

In terms of the allocation mechanism, MegaETH's allocation mechanism largely adheres to a community-oriented approach, from seed round financing to the elite community-only financing platform Echo, and then to the NFT sales targeting individuals deeply involved in the Crypto industry, as well as the upcoming ICO on the more equitable public token sale platform Sonar on Echo, avoiding the monopolization of shares by institutions in traditional financing.

It is worth emphasizing that the “The Fluffle” series SBT issued by MegaETH has also discarded the tradable attribute. The token release adopts the “TGE 50% + 6 months linear unlocking” model. At the beginning of the unlocking, the token rewards for holders are linked to the depth of interaction with the network, encouraging real user participation through a dynamic evolution mechanism.

In terms of ecological construction, MegaETH is gradually unfolding through the accelerator program MegaMafia, the flagship builder center MegaForge, and the stablecoin MegaUSD. The testnet has attracted multiple application deployments, covering various fields such as DeFi, social networking, gaming, and AI. Some selected applications include the DEX GTE, the stablecoin engine CAP, the real-time perpetual contract platform Valhalla, and the trend trading platform NOISE.

Risk Warning

Despite its outstanding highlights, MegaETH still faces multiple challenges. In a horizontal comparison, the current valuations of mainstream Layer 2 solutions have set a reference benchmark for the market, with Arbitrum FDV at 3.2 billion USD, OP FDV at 2 billion USD, Starknet FDV at 1.2 billion USD, and Zksync FDV at 800 million USD. Against this backdrop, it remains uncertain whether MegaETH can break through the 2 billion USD FDV.

As an early project, MegaETH also faces risks such as technical implementation and overall market volatility. Investors need to maintain rational judgment and make prudent decisions based on specific pricing, FDV, and token economic models after the detailed sales terms are announced. DYOR.