Vitalik-backed MegaETH sees token fall 55% on first day trading

MegaETH’s token is off to a shaky start.

On Thursday, the layer 2 blockchain, which lists Ethereum co-founder Vitalik Buterin among its early investors, launched its MEGA token, airdropping some 500 million tokens to those who bought them during the project’s October public token sale.

The token began trading at 11 am London time and initially rose to an all-time high of $0.38, according to CoinGecko data.

But it quickly began to sell off, dropping some 55% to trade at around $0.17.

Despite the volatility, those who bought the token during the public sale are still in profit. MegaETH sold the tokens at a clearing price of $0.0999 each, raising just under $50 million.

The project also sold 500 million tokens via a $10 million funding round on Echo, the early stage investing platform, at $0.02 each.

MegaETH’s wobbly launch comes as investor appetite for new crypto tokens dwindles.

The crypto market has been in the lurch since October, when it experienced a huge, structural crash that triggered over $19 billion in leverage liquidations.

Since then, investors' interest has been mostly limited to established cryptocurrencies, such as Bitcoin.

Slow start 

MegaETH is an Ethereum layer 2 network which touts itself as the first “real-time blockchain” capable of over 100,000 transactions per second.

The project previously secured $30 million in venture funding, almost $28 million by selling NFTs, and another $50 million selling tokens, bringing its total raise to around $108 million.

Yet despite the huge amount of funding, MegaETH has been slow to take off.

After launching in February, the blockchain has only seen $314 million in deposits to DeFi protocols, with top DeFi lender Aave accounting for just over 71% of its total deposits, per DefiLlama data.

Ethereum, the biggest blockchain for DeFi, hosts some $63 billion of deposits to protocols.

MegaETH isn’t the only hyped-up blockchain to see its token fall after launch.

Plasma, a high‑performance blockchain built for stablecoin payments, launched its XPL token in September. After a brief rally that saw the token hit an all-time high of $1.68, it began to fall. The token now trades at around $0.09 — a 94% drawdown.

Monad, another blockchain designed for extreme speed and scalability, launched its token in November. It’s down some 43% from its all-time high set shortly after its launch.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.