New Narrative of MegaETH Revenue: Collaborating with Ethena to Launch Native Stablecoin USDm

Source: MegaETH

MegaETH is the ultimate battle of the ETH ecosystem, supported by key figures in the blockchain space such as Vitalik, Joseph Lubin, and Dragonfly. It boasts extremely low latency (only 10 milliseconds) and high performance (TPS up to 100,000), providing the infrastructure possibility for the blockchain's iPhone moment.

For most Layer 2 solutions, the profit model involves additional profit margins from sequencer fees and gas fees. However, this also creates a contradiction between users and the public chain: the more users pay, the more profit the chain earns.

To achieve the scalability of DApps (e.g., high concurrency) and enable new scenarios (e.g., high-frequency quantitative trading), low network fees are a killer tool for growth. Just as Memecoins need low network fees, although born in the ETH ecosystem, their ultimate growth is in the Solana ecosystem.

Relying on sequencer revenue becomes more unstable and difficult to sustain in the long term as technology advances (increased throughput, decreased data costs). Increasing fees to protect profits will directly stifle innovation and growth.

MegaETH is collaborating with Ethena to introduce the new native stablecoin USDm, aiming to unify the network's incentive mechanism. This approach allows MegaETH to run the sequencer at cost, providing users and developers with the lowest usage fees.

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

Today, Megaeth officially launches USDm, a native stablecoin designed to support various innovative applications on MegaETH. USDm is issued through Ethena's stablecoin architecture (see below) and is designed to be deeply integrated into MegaETH's 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 collaborate 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 issuance, with its reserves primarily invested through Securitize in BlackRock's tokenized U.S. Treasury bond fund, BUIDL. It also holds some stablecoin liquidity to manage redemption demand, providing transparent, institutional-grade reserve support and a predictable revenue foundation.

Reserve Flexibility

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

Operating Expense Coverage

The revenue from the underlying reserve will be directly used to cover sequencer operation 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 various blockchain use cases such as high-frequency trading and payments.

Realignment of Incentive Mechanisms

As network costs increase due to growth, we do not need to raise fees on users to maintain sustainability. The more active the network, the more prosperous the ecosystem; stablecoin revenue then provides funding support for the network. When transaction fees are stable and below one cent, many application categories that were previously unfeasible under the "each operation costs several cents" condition will become viable.

Stablecoins already active on MegaETH, such as USDT0 and cUSD, continue to be first-class citizens in the ecosystem, widely used in wallets, payment gateways, DEXs, and money markets. As USDT0 serves as the standard representation of USDT on MegaETH, we will maintain its deep liquidity, oracle coverage, and optimal execution routing so that developers and users can choose the most suitable asset as needed.

Why Choose Ethena?

Ethena is the protocol behind USDe, the third-largest and fastest-growing USD-denominated crypto asset in history. Currently, Ethena's TVL exceeds $13 billion, its user base ranks among the top in DeFi protocols, and it has integrated with multiple top-tier centralized exchanges and mainstream DeFi applications. Ethena has showcased its ability to scale rapidly and securely, becoming the third-largest USD issuer in the crypto space.

Ethena's reserve-backed stablecoin conduit, USDtb, has seen rapid adoption and institutional applications. Currently, USDtb's circulating supply is approximately $1.5 billion, and as the first stablecoin poised to meet compliance requirements under the "GENIUS Act," it is in collaboration with Anchorage Digital Bank. The reserve of USDtb is primarily invested through Securitize in the BlackRock US Treasury Bond tokenized fund, BUIDL (target allocation of approximately 90%).

At the same time, Ethena and Securitize have achieved a 24/7 atomic swap between USDtb and BUIDL, further enhancing settlement efficiency and transparency.

We are excited to partner with Ethena to bring a top-notch DeFi user experience to MegaETH.

About Ethena

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

About MegaETH

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