New Narrative of MegaETH Revenue: Introducing Native Stablecoin USDm in Partnership with Ethena

MegaETH is the final battle of high-performance chains, supported by key figures in the blockchain field such as Vitalik, Joseph Lubin, and Dragonfly. It boasts extremely low latency (only 10 milliseconds) and high throughput (TPS up to 100,000), providing the infrastructure possibility for high-performance scenarios (transactions, payments, etc.) in the DeFi era.

Most Layer 2's profit model involves additional profit margins on top of sequencer fees and Gas fees. However, this creates a contradiction between users and the public chain: users need to pay more for the chain to profit more.

To achieve the scalable growth of DApps (e.g., high concurrency) and enable new scenarios (e.g., high-frequency trading), low network fees are a key driver for growth. Just as Memecoins require low network fees, although they originated in the ETH ecosystem, their ultimate growth is in the Solana ecosystem. The reason behind this is that Memecoins have a greater desire for speed than other traditional DeFi types. With the emergence of CLOBs (Central Limit Order Books) and other forms, more high-performance scenarios are also pursuing ultimate speed, such as on-chain high-frequency trading.

However, relying on sequencer revenue becomes increasingly unstable and difficult to sustain in the long term as technology advances (increased throughput, decreased data costs). Seeking to protect profits by raising fees directly hampers innovation and growth.

MegaETH collaborates with Ethena to launch a new native stablecoin, USDm, designed to unify the network's incentive mechanism. This approach allows MegaETH to run sequencers at cost price, providing users and developers with the lowest usage fees.

Through USDm, MegaETH shifts the network's funding source from "user fee payment" to "financial returns," supporting network growth.

Today, Megaeth officially launches USDm, a native stablecoin created to support various innovative applications on MegaETH. USDm is issued through Ethena's stablecoin framework (see below) and is designed to be deeply integrated into MegaETH wallets, applications, and on-chain services.

"USDm means users can enjoy lower fees while app developers have a broader design space. Megaeth is excited to partner with Ethena to create a win-win situation for all participants in the ecosystem."

Reserves and Revenue

USDM v1 is built on Ethena's USDtb track, with its reserves mainly invested through Securitize in BlackRock's tokenized US Treasury bond fund BUIDL. It also holds a portion of liquidity stablecoins to handle redemption demands, providing a transparent, institutional-grade reserve backing and a predictable yield foundation.

Reserve Flexibility

Ethena's stablecoin architecture has long-term scalability, allowing MegaETH to flexibly adjust the collateral composition of USDM, incorporating other existing or future Ethena products (such as USDe). While USDM v1 will launch based on USDtb, its underlying design allows the reserve structure to dynamically adjust with changing market conditions.

Operating Expenses Coverage

The revenue from the underlying reserves will be directly used to cover the sequencer's operating costs. This enables us to price Gas based on operational costs, maintaining low and stable fees for users and developers without relying on additional profit margins. This benefits a wide range of blockchain use cases such as high-frequency trading and payments.

Realignment of Incentive Mechanisms

As the network's costs increase due to growth, we do not need to raise fees for users to maintain sustainability. The more active the network, the more prosperous the ecosystem; stablecoin revenue then supports the network. When fees are stable and below one cent, many application categories that were previously impractical under the "each operation costs several cents" condition become feasible.

Stablecoins that are currently active on MegaETH, such as USDT0 and cUSD, remain first-class citizens in the ecosystem, widely used in wallets, payment agents, DEXs, and money markets. USDT0, as the standard USDT representation on MegaETH, will continue to maintain its deep liquidity, oracle coverage, and optimal execution routing, allowing developers and users to choose the most suitable asset based on their needs.

Why Choose Ethena?

Ethena is the protocol behind USDe, which is historically the third-largest and fastest-growing dollar-denominated crypto asset. Currently, Ethena's TVL exceeds $13 billion, with a user base ranking at the forefront among DeFi protocols and has integrated with multiple top centralized exchanges and mainstream DeFi applications. Ethena has demonstrated the ability to scale rapidly and securely, becoming the third-largest USD issuer in the crypto space.

The reserve-backed stablecoin channel USDtb of Ethena has achieved rapid adoption and institutional use. Currently, the circulating supply of USDtb is approximately $1.5 billion, and as the first stablecoin expected to comply with the "GENIUS Act," it is collaborating with Anchorage Digital Bank to advance. The reserve of USDtb is primarily invested through Securitize in BlackRock's U.S. Treasury bond tokenized fund BUIDL (with a target allocation of about 90%).

Additionally, Ethena and Securitize have enabled a 24/7 atomic swap between USDtb and BUIDL, further enhancing settlement efficiency and transparency.

We are excited to collaborate with Ethena to bring a top-tier DeFi user experience to MegaETH.

About Ethena

Ethena is the protocol behind USDe, which is historically the third-largest and fastest-growing dollar-denominated cryptocurrency asset. Ethena's TVL currently exceeds $13 billion, with one of the largest user bases in DeFi protocols, and has completed integrations with several top centralized exchanges and mainstream DeFi applications.

About MegaETH

MegaETH is the first real-time blockchain, secured by Ethereum, and driven by a highly optimized execution environment and heterogeneous architecture. It can achieve streaming throughput, has ultra-low latency (only 10 milliseconds), and high performance (TPS up to 100,000). Developers can scale applications via real-time state streaming, while users can experience instant transactions while fully retaining Ethereum's composability.