# MegaETH Token Launch with Co-Founders Shuyao and Lei

*Author: Ryan Sean Adams, David Hoffman*
*Published: Apr 30, 2026*
*Source: https://www.bankless.com/es/podcast/megaeth-token-launch-with-co-founders-shuyao-and-lei*

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**TRANSCRIPT**
David or Ryan:
[0:02] We are here with Shuyao and Lei, two of the three co-founders of MegaEth on the day of their token launch. Big day. Are you guys nervous?

Lei:
[0:12] Yeah. So we shouldn't supposed to say, we shouldn't say nervous because when the podcast is out, it's no longer nervous. But yeah, for now, yes, it is.

David or Ryan:
[0:21] Yeah, we're recording this a day and a half ahead of actual token release date. So we actually don't know what the conversation is at the time. But the quick timeline here is you guys have done a series of just kind of like private token sales. You guys did an Echo sale. You guys did an NFT sale. And so there are some token holders out there that are awaiting the TGE. And then really the thing that the MegaEth project did was it did these KPI locks. Can you just talk about the philosophy about the KPI metrics that you guys put yourself behind before we could ultimately get to this date? Why do that in the first place? And then seemingly, since there is a TGE date, we've hit them. How did we hit them? What's just the health of all the KPIs? And talk to us about just the road so far. Shui, I'll throw this one to you to start.

Shuyao:
[1:11] You know, I was going to say that I'm so excited that we're finally TGE. I think unlike most projects, right, you launch the main night, your TGE, kind of just get it over with and your baby's out in the public. I think for us, it's like the baby is there, but no one is able to see it. And then we're finally able to reveal the baby via this token, which I believe token is not a product. Token is part of the infrastructure. I think the TG itself kind of marks the completeness of Mega as a protocol. But to answer your question directly, why did we set up these KPIs, right? And the more often I say the word KPI, the more...

Shuyao:
[1:53] Like a weird feeling I have because they're like to sound so strict, but they're really celebratory milestones instead of KPIs. The idea was rather simple. I found it really odd that insiders can just get 60% or 50% of a protocol's token at launch without doing much or metrics to prove that they've done the work. So from our perspective, it's 2026 and I've been in crypto for eight years. I think just the old game is not worth playing anymore. And we want to exercise this philosophy of building public, have the public monitor exactly what's happening with Mega. And that's why we set the KPI and basically hold everyone accountable. And it's not just the Mega core team. It's also our applications. We can't launch unless they launch. And if they want to get traction, they better integrate and go live on mainnet. So that is the original philosophy of KPI, which is like, game is different.

Shuyao:
[2:54] Let's do the best of our work. That's why and how we can prove Mega Deserve to exist. I can go deeper into how we set up the three KPIs if you want to, but I will pause here.

David or Ryan:
[3:05] Yeah, the KPI that was checked, the box that was checked was the 10 apps that are live on MegaEth. But to my understanding, there are, this is 10 unique apps, not just like another Aave deployment or like another Uniswap deployment. So talk to me about the 10 apps. I mean, you don't have to go one by one by one, but just like the philosophy of like, you guys actually had to like choose, these apps do count, you know, Aave, much respect to Aave, Aave did not count. Talk to me about that like philosophy.

Shuyao:
[3:35] DeFi United.

David or Ryan:
[3:37] Okay.

Shuyao:
[3:39] Our criteria has always been very simple, which is MegaEath brings out novel application to crypto. And unless you are really novel and it's even better that you can't exist anywhere else, then I think Mega as a protocol deserves to exist. So I will highlight some of the apps that I am personally really excited about. So we can start from Dex, right? I think since day one, we just knew that Mega is not going to create another hyperliquid. In fact, I don't think we need another hyperliquid. I think DEXs also need to differentiate themselves. So we work with the world market team to create this fully on-chain DEX.

Shuyao:
[4:21] They don't have backend. The protocol is their backend. And anyone can deploy frontend. That's something we're really excited because it's only possible on Mega. I use the cheesy term, Omega. And then if we consider, you know, the type of wordmark, which is fully on-chain DAX, as this like right-curve app, right? Very sophisticated. It took the team five years to build it, by the way. Like, I'm not sure people understand how difficult it is to build a DAX. And then we also have a bunch of what I call them the left-curve apps. The left-curve apps are really the goal is to bring in order flow, is to bring novel experiences to users. And I'm sure your audience are familiar with the euphoria of the world, the hit one of the world. And by the way, even these apps are difficult to build because every single financial experience involves market makers, involves settlement. It involves user experiences that needs to feel real time. So the reason the KPI took two months to hit is precisely because... It was a little hard for all of them to get together and integrate in time.

David or Ryan:
[5:29] Is that because, I mean, in DeFi, the cool thing is we're composable. You know, Uniswap plugs into Aave, which plugs into like the Next app. And, you know, that's something that every single chain has,

David or Ryan:
[5:41] the feature of composability. But does the fact that MegaEth is going after like unique apps, unique experiences, apps that haven't been seen before, they're all a little bit more precise. like the specific size and shape of the puzzle piece is more unique than it's ever come before. Is that part of the difficulty of you have all these unique apps and hit one and the market makers in the back end of that that connect it to like world markets. No one's ever done those connections before. Those are all novel. And so maybe the composability has been a more unique challenge than any chain that's come before. Am I onto something here? That's just my speculation. Does that, am I onto something here?

Lei:
[6:20] Yeah, 100%. I think composability, so I think we question ourselves a lot. Why do we need to build a new chain? What's the point of having really beefy chain that can host all the applications you can think of on a synchronously composable substrate? And yeah, composability, I think is the ultimate reason monolithic chains need to exist. So there are, I think to me, the most interesting combo is HIT1 and WCM. I think you can draw a very interesting parallel to how traditional finance markets form. So you have NYSE and NASDAQ of the world, and then on top of them, you have brokers that face the retail, for example, Robinhood. So a kind of fundamental structure here is that you have exchanges as the ultimate settlement layer, and then you have different brokers that cater to different kinds of users. And so on MegaEth, HitOne is one such broker that caters to people who wants to Probably, I would say YOLO a little bit, open a kind of a high leverage position, per position on blue chip tokens. And then they pass users' positions down to WCM, open a position there, a one-to-one mapping.

David or Ryan:
[7:41] In some sense, they are kind of a proxy or they're kind of a broker,

Lei:
[7:45] A kind of a curated experience for a specific group of users to trade on WCM. But then underlying their tap into WCM's liquidity because it's kind of a one centralized piece of market infrastructure that in addition to hit one, other market players can also, other market participants can also play with. So I think this is just one example of DeFi composability, but with lending being bootstrapped right now, we also expect to see just the normal DeFi composition between lending and yield-bearing tokens and stuff. So yeah, I found it to be quite exciting. So yeah, you're right on the point.

David or Ryan:
[8:25] Yeah. WCM World Markets. This is a project on MegaEth that when I talked to the founder, I found pretty uniquely compelling. And this is another thing that I want you guys to check me on. It's like, it seems that world without like, it seems like they do sort of represent some app center to all the other apps because of what it is. And maybe I'll describe what it is for the listeners, just because I'm sure a lot of them are just kind of tapping into just like the depth of the mega ecosystem pretty recently. And so like World, it's a fully on-chain centralized exchange as a DEX. And it has like all of the features and products that you would expect in a centralized exchange, but as a DEX. And so you have like margin accounts, you have spot markets, you have, you know, perps markets. and the reason why they put so much stuff on chain is because mega ETH has the room for it. And because it puts like, Shudya, you mentioned that the whole state of world markets is on chain. Like there is no backend. The backend is mega ETH. There is no extra data or extra computation happening. The whole system is on chain and we haven't seen that ever before. And that's like, that's the cool new thing about world. But that is, is that,

David or Ryan:
[9:41] Operating as infrastructure for the rest of the mega eth apps so like late you just talked about how you know hit one is the retail oriented kind of like gambling consumer app uses world markets as the back end but not just not just hit one but also bricks bricks is tokenizing a lot of emerging market yield opportunities accessible accessible on world markets as i understand it So it seems to me like World is kind of positioning itself as kind of like the universal market front end, at least for the current state of the mega app ecosystem as I see it today. You guys are both nodding your head. Is that kind of how it's shaping up to be? Yeah, 100%.

Lei:
[10:21] And this is where I think composability really shines. Because if you, yes, you can, of course, build, say, hit one and bricks each as an app chain, as an app on an app chain, but then liquidity between the two apps will not interplay, right? And yes, you can have, I think nowadays, cross-chain transfers are becoming faster and faster. But i think a few weeks ago we just saw the uh like the other side of it right because you're also still sustaining a lot of centralizing risks yeah so exactly right world is kind of becoming a like a central yeah when i said central i didn't of course didn't mean centralized exchanges exactly so like a hub of liquidity of liquidity on mega eth and

David or Ryan:
[11:08] Let's talk about MUSD. Every single app that I've talked to so far, Euphoria, users, USDM.

David or Ryan:
[11:15] USCM, excuse me, USCM, the MegaEth native stablecoin. Is every single one of the apps that, the 10 apps, the 10 out of the 10 apps that unlocks the TGE, they are all integrating USDM?

Shuyao:
[11:27] So for audience who are not familiar, I think, let's zoom back, right? I think when Mega comes out, we basically redefine what a blockchain is. I think the idea of blockchain as just a chain database is just gone, right? You build a fast chain, but then you also have to build the economic engine on top of it. You also have to facilitate liquidity hub, which is the world market. And I look at our stablecoin as part of the infrastructure. And the goal is very simple, right? The goal is if you are part of the ecosystem, we rally behind a protocol native stablecoin that gives everybody comfort and ease of familiarity to use USDM. But in the meantime, USDM, the yield generated from, you know, the stable coin is going directly back to the token holder. I'm a very strong advocate. You know, people are saying token is dead and everything's equity. I just think they lack imagination. I think Mega is a token business. And USDM is like our first revenue stream, which, you know, we're collaborating with our ecosystem, rally behind it to make sure that, you know, people who believe in mega and taking risk, right, in participating in the ecosystem are getting compensated and rewarded. And, you know, we're not abandoning them. Like we love our token more than anyone else.

David or Ryan:
[12:50] And part of this was downstream of the fact that the whole point of mega ETH is to like not charge chain fees, right? And so because mega ETH has such high throughput, the chain fee revenue model is kind of just borked from the get-go, right?

Shuyao:
[13:05] Exactly.

David or Ryan:
[13:07] Yeah. Okay. So that's one of the two revenue models that I'm aware of. USDM, the yields, like the treasury yields, the interest rates that you get with being a stable coin. The other one is co-location. Talk to me about the co-location vertical and like the state of that whole project.

Lei:
[13:22] Yeah. The co-location protocol is kind of centered around the question of how can we capture a fair share of value for the volume, for the transaction volumes on the chain. So if you think about USDM and the collocation protocol, USDM captures money's value at rest and the collocation protocol captures value when the money's not moving or like actively participating in trading. Yes, exactly. So it's mainly centered around our whole architecture of having a few beefy sequencers, being the servers processing the transactions. And around them, we can build a semi-exclusive cohort of servers where we can rent out to interested traders and market makers to enjoy low latency.

Lei:
[14:14] And MegaEath is uniquely positioned to build such a service because of the low block time. Because if you think about, say, Ethereum or even many other layer twos and, of course, other layer ones, their block times are on the order of at least several hundred milliseconds.

Lei:
[14:30] And if you put that within the respect of the network latency, the network latency is not actually too much. say, from New York to Tokyo, the round trip is maybe 150 milliseconds. So compared to that, the 200-millisecond block time might dominate the entire end-to-end latency. Whereas on MegaEth, because we have 10-millisecond block time, suddenly the network latency becomes much more important.

Lei:
[14:57] So then it's kind of the incentive for market makers and for serious traders to want to minimize that network latency so that they get an edge in trading. Yeah, so this is kind of the whole motivation of having this protocol. And the mechanism is basically people can participate in biddings. And I think we have multiple tiers designed. I think the closest tiers, the tiers that are closest to the sequencer, will be a bidding process to determine who can get access. And then we have like an outer ring where people can just pay some upfront predetermined amounts to participate. And once they get the seat, they will be able to hold a seat for some predetermined amount of time. They can set up their infrastructure. We also plan to provide them with low latency RPC and low latency data indexing. It's kind of an all-in-one suite of services so that even individual traders who are just interested in, say, market making Omega, if they do not need to hire a 10-person team to build out the data pipeline, they can just come and connect to our pipeline and start trading. So yeah, so this is kind of the paradigm. And again, as I mentioned, it's just to kind of, we're kind of designing it to be very coherent with USDM so that some value is captured regardless of, say, the macro, whether the interest rate is high or low.

David or Ryan:
[16:17] Le, this idea of co-location and this revenue model, how would you compare this to sort of MEV. Is this essentially like block ordering?

Lei:
[16:25] Yes. Well, it is very similar to MEV, but we're taking a very different approach. I think MEV is trying to do microscopic options in the sense that they try to do an individual round of auction to determine the individual transaction ordering of every individual block. And if you have a block every, say, 12 seconds, this is

Lei:
[16:47] Somewhat doable, but I do know that I think even Ethereum layer one is trying to reduce the block slot length. So I think having an auction per block, as you decrease the block time, it will be problematic because how can you say, gather information, gather bits from all parts of the world, say every few hundred milliseconds, if not every tens of milliseconds to determine the transaction ordering within the block. So our approach is to not do microscopic auctions or to determine the transaction ordering for every single block, but rather we consider this kind of predetermined amount of time, for example, several weeks, where we host an auction or we rotate the participants in the proximity protocol. And once determined, they hold the seat for several weeks so that we do not have to run so many auctions per block. and then they compete on physical time, for example. Time to finish an order, time to kind of compute and response to a market event, and of course, competition between the different tiers of the proximity market. So this is kind of a slightly different approach we're taking. But overall, yes, this is kind of taking...

Lei:
[18:10] It's kind of making profit from the same pool of money as MEV, but we are just, I would say, distributing it or allocating it differently. I think for MEVs, I think it's very easy for individual searchers to get semi-monopoly. But in our case, we have built-in mechanisms to make sure that within each tier, the profit is distributed more evenly and more fairly, for example,

Lei:
[18:37] by adding random jitters.

David or Ryan:
[18:38] So let's complete the circle here and talk about how these two revenue drivers, I mean, you'll go get to token value accrual. Because the nice thing I think about MegaEth and what you guys are launching here is that many blockchains don't think about their business model, have never thought about their business model. But MegaEth comes baked in with like revenue drivers, which is, that's new for crypto. So how do these sources of revenue then at the top line get back to some sort of value accrual story to the token? How does it make its way all the way back to token holders?

Shuyao:
[19:15] Yeah, I think getting business model right was when we started Mega, we were like, OK, just producing block space is not a good business. And we also have some big news coming in May. Yeah, so all I'm saying is we've been building a lot of things beyond just a blockchain. In terms of, you know, token, getting value back to token holder, there are many ways to do it. And I'm not certain how much I can say, but based on...

David or Ryan:
[19:44] Depending on, you know, what my general counsel tell me.

Shuyao:
[19:47] What I'm super clear is the dollar that Mega takes home, right, whether it's from proximity markets or from USDM, that is going to buy back Mega. In terms of the mechanism, we are deciding the best and the most fair way to the market given the past experiences and you guys have seen it on Twitter. There are different ways to do it and then there are ways we can disclose it. From our perspective, we just want to assure everyone that, you know, the money is not going to go to the core team's pocket. The core team is very incentivized to have the token go up. And the primary reason is that the core team only took 9% of the entire token pie chart. So for us to also get, we are also incentivized to get more mega, to hit our KPI, to continue to earn tokens. So everyone, I think the mega token is so beautiful because it just aligns people who are naturally not aligned.

Shuyao:
[20:48] Historically, right? The retails are complaining the VC is dumping on them. The VC is saying, hang on, the founders also dump on me. And then everyone is just like pointing at each other like Spider-Man. But what we're trying to do here is like, look, the core team took Solito. Look, we give retail allocation at very low valuation Look, this thing has a revenue stream And look, everybody earned token by staking to earn KPI And look, by the way, we love Ethereum so much That one of the KPIs is Ethereum decentralization So yeah, I think things come into a nice place Because we just spend hours trying to like Again, apply imagination and creativity to token Because we don't view tokenized equity.

David or Ryan:
[21:36] You said one of the KPIs is Ethereum decentralization. What is that for those not familiar? Like, what are you measuring there?

Shuyao:
[21:43] I can share the rationale because we are an Ethereum layer too, and we took performance trade off. It is to our interest that Ethereum layer want to be as decentralized as possible. So instead of just shouting it on top of our lawn, we're like, oh, we're just going to allocate token toward that KPI. and everybody wins if that KPI is getting hit.

David or Ryan:
[22:08] So the two business models that I see out of MegaEth, one is the MEV markets, which I see like you guys have a, not a decentralized blockchain, but like some of the infrastructure is actually quite centralized and that's the advantage that you guys have. And so what you guys did with that feature is you really just formalized and structured the MEV markets around MegaEth. And MEV is something fundamental to blockchains. there is no such thing as a blockchain that does not have some notion of transaction ordering. And so it just makes sense. Take the thing that's fundamental and make a business model around it. Stablecoins aren't like technically fundamental, but in 2026, we look at stablecoins on all the chains and it seems like if you are an alive blockchain, you have an alive stablecoin ecosystem along with it as well. So technically not fundamental, but it feels like it is. And so you're taking the two most seemingly fundamental business models and you're kind of just turning it into revenue for the token. Are there any more? Is there a third that you guys are ideating? Or if I'm just putting on my investor hat and I want to like look at the long-term potential of Megith, are these the two that I should focus on?

Lei:
[23:17] I would say we're a very focused team. So that's also we kind of try to pick. So it's all about kind of deciding how to allocate the revenue within the ecosystem, right? I think the chain team should be

David or Ryan:
[23:29] A bit restrained, I would say, so that there's a vibrant app ecosystem, they can get their fair share.

Lei:
[23:35] But meanwhile, yeah, we also need to, yeah, we also need the tokens to do well. So it's a kind of a delicate balance, I would say. So what I can say is we are very focused and we are thinking about something that I think is equally fundamental as the other two.

Lei:
[23:52] But yeah, no detail to share right now.

David or Ryan:
[23:55] Let's get into the actual TGE details. So TGE, tokens alive and trading, I'm an investor in the pre-sale. I think I have a one-year lockup. So whose tokens are trading? Who's the first party of people that gets their tokens? And what's the supply? And so talk to me about the release schedule of the token. Who gets how many tokens first? Who gets how many tokens second? How does the token actually come into the ecosystem?

Shuyao:
[24:23] I think our token is super transparent. I think to start with, everyone had a cost base. Everyone who gets mega invests in mega there is zero airdrop farming i think when we started there's no airdrop farming we we got basically hated by everyone people thought we were being arrogant or some sort but i think now looking back it was just the right decision there's no hidden airdrop right as we all know a lot of team play around with their tokenomics that just like doesn't happen with us. So day one, we have obviously the Fluffle and ICO, those people who chose not to log. We actually surprise and log 20% of ECHO participants. It's funny, we have this Telegram group called People's Chat. And then we have all of our just different phase of ICO investors. And a lot of them were like, oh my God, like ECHO bros, we invest so early, where's our token, blah, blah, blah. And then after a while, we were like, actually, you know what? These people believed in us before we were even a thing, like before any of the apps went live. So, we decided to unlock 20% of them. So, at least people can get some of their money back.

David or Ryan:
[25:36] So, the people who bought the Fluffle NFT, they are 100% unlocked. Those are the supply of tokens coming online, day one. 20% of the Echo sale people, the people who elected to lock for a longer time for a better term. 20% of those are also unlocked. And those are the two pools of people that are unlocked day one.

Shuyao:
[26:01] And then also the ICO participant who chose not to lock.

Lei:
[26:05] Okay.

David or Ryan:
[26:07] Oh, right. There were three sales. Fluffle sale, the Echo sale, and then the ICO. Was that the correct order of time? The ICO happened most recently?

Lei:
[26:15] Okay. Correct. The first is Echo.

David or Ryan:
[26:17] First is Echo. Okay. What's the total supply of the tokens that'll be online at the end of the day? Do we know this?

Shuyao:
[26:25] You can't do the math. The math is pretty straightforward.

David or Ryan:
[26:28] Okay. We'll leave that to the listener. No, we'll have Claude do the math after. We'll have Claude do the math. Leave it in the show notes. What happens next? So then with regards to just the token release or anything related to the token, are there incentives? Will the lack of an airdrop continue to be a lack of an airdrop? Or what are the next milestones that anyone interested in token should know?

Shuyao:
[26:53] Yeah, I mean, we're recording on Tuesday. So we just announced our portal, which is called Terminal today. And the goal is to surface applications that's being built on Mega. And then we have program, it's an incentive campaign around it. And the goal is very simple, right? Like there's, like, we don't like points, airdrop farming, but we think people should get rewarded if they're actually taking risk with their time and then capital to support Mega-only applications. So we have that coming up today. And then actually on Thursday, we're going to unlock another wave of novel applications. So there will be a few waves that's coming in. and every app has been curated by us. We have made sure that they've.

Lei:
[27:38] Done their audits,

Shuyao:
[27:38] If not just one audit. We know the people, we make sure that, you know, there's.

David or Ryan:
[27:44] They're real. And then we were able to like go to market with them.

Shuyao:
[27:48] So I think Terminal is very interesting. We also have the program for our KPM, which is called Flux. That's also going to come live on Thursday. And it's basically allowing people to participate into our KPM. So you can get your token. And basically, you know, people need to make the decision, right? Do I want to sell my token or do I want to participate in Flux? And then for me to earn more mega token. And the idea is, you know, the earlier you participate in Flux, the better the term is. So yeah, that's another product we're very excited about. And the last one in May, we have another brand new product we're launching.

David or Ryan:
[28:28] So it seems to me that MegaEther is breaking a lot of the conventions in crypto. Like, I mean this in a good way, right? So shipping with a business model, that's new, that's different. Most chains don't do that. Shipping without kind of doing the airdrop thing where every token holder has a cost basis. Even the architecture, of course, which is just like maximizing centralization, but within the boundaries of Ethereum's decentralization. I mean, these are conventions that are kind of new and have been broken. I was actually thinking about you guys the other day when I saw a tweet from the new VP engineering of Polymarket, which of course, Bankless listeners are familiar, very successful app within crypto, So maybe the most successful app crypto has actually built. So they're launching perps and doing some other things. And one of the things that the new VP engineering said is,

David or Ryan:
[29:22] We need to scale. And the current infrastructure that we have today is not necessarily going to scale with us. So we need something different. I immediately thought of mega ETH because that's how you guys are architected. That's how you are built. But if a polygon, sorry, if a polymarket was going to migrate to mega ETH, let's say, that would be a pretty large successful application making that migration. And I guess my question is like, can MegaEth support that, the size of that sort of an application? And does that fit with the thesis? This is a way of asking like, what's the role for kind of the app chain type of model in crypto? And where do you see that evolving? Is something like Polymarket better off with their own app chain? Or could you see them finding a home in a highly performant chain like MegaEath? And what are the trade-offs there?

Lei:
[30:24] Interesting. So I think we kind of touched on that point a little bit a while ago. So it's about what's the benefit of a monolithic chain with high performance that can host many apps and to have them compose synchronicity? And the key here is composability. So I think we went through a few examples. And if like a hypothetical application can come and there are a bunch of existing primitives on MegaE that are

Lei:
[30:51] Thriving and with lots of liquidity, lots of interesting existing users, I think this is a major benefit to these new applications. And this is also one of the north stars when we curate our ecosystem. We just keep asking ourselves, can we cultivate a cohort of applications such that when new applications are kind of shopping around for chains to build on, they can immediately recognize that, okay, hey, MegaEath has everything I already have, not just in terms of performance, but also in terms of building blocks. And they might realize that it takes very little time or effort to build what they want to build on top of MegaEath. So this is kind of our ultimate end game in terms of ecosystem. And then kind of coming back to a more technical perspective, I think building on a chain that already exists, I think it just saves a lot of headache. Like Shuya and I went to New York for a micro offset and we also got to meet a bunch of mega mafia funders. I think we kept hearing from them that, we kept hearing them telling us that, you know,

Lei:
[31:59] Yes, we know there are app chains, so many stacks to choose from, but you know, we just want to build apps because it's such a pain in the ass to get all the infrastructure ready for an app chain. Think about on-ramping, off-ramping, bridging security, getting the servers, paying for the servers, thinking about gas tokens and

Lei:
[32:21] Yeah, and all sorts of stuff, right? So RPC, for example, I think each individual ticket is not a big effort, but combined, you cannot imagine how much time and energy we have to burn on just getting all those infrastructure projects and infrastructures lined up for a chain. So I think building on a monolithic chain also saves that headache from app founders. And then I think composability or asynchronous composability or cross-chain transfers, however you want to call it, I think there are fundamental limits.

Lei:
[32:58] Light clients are not there still. So without light clients for layer ones, it's, I would say, almost impossible for people to build fully trustless, fully decentralized cross-chain transfers. And I think that's a big headache. So just technical-wise, I don't think you can get as seamless or as secure of an application if you just build an app chain. So yeah, yeah. And I guess finally the brand, the distribution channels, a model of the chain might have, it's more like people banding together into some sort of a nation or some sort of like a federal, federated states, some sort like that. I think these are the main benefits, I think, to build on a chain. But of course, I think some applications that does not, there are, of course, applications that do not care about or do not care a lot about, say, the cost of upkeeping the infrastructure. They have their own distribution. Yes, and I would say, yes, it's probably more beneficial for them to build an app chain just because they control the entire app stack, sorry, the entire tech stack. So I think there

David or Ryan:
[34:09] Are pros and cons. And would MegaEth have the scale to support a polymarket? I mean, I know this is a very precise question that's probably like between you and another, you know, engineering lead, but just like off the cuff, right? We kind of know what they're doing on their existing chain today and say that they want to 5X or 10X that. Does MegaEth support that?

Lei:
[34:31] Yeah, that's, I'm pretty confident. And I think actually one, actually Brad from our team, I think he did a calculation And I think MegaEath can host some 300 Polymarket instances right now.

David or Ryan:
[34:44] So, yeah. Wow. He made a tweet. Yeah. 300 Polymarket instances? 340 some, yeah. Can you remind people how you're able to do that? Like what's kind of the MegaEath architecture and shortcut? Yeah, what's the secret sauce, the X Factor?

Lei:
[34:59] Yep. So, yeah, actually not too much secret sauce, more like an interesting architecture. So as you mentioned, we have a few very beefy sequencers that process channel actions, and that saves us a lot of the consensus, the cost of consensus. And yeah, we have a new state try, which is basically the data structure that allows Ethereum to compute that Merkle root, that state root in block headers. It turns out that that particular data structure used in banana ethereum or many other evm compatible blockchains are accounting for over 90 of the overhead when building blocks so we got rid of that and replaced it with a in-house designed data structure plus implementation and that completely eliminated that bottleneck where at least 10 10x faster if not more than in the middle of our data structure. And then optimizations here and there, for example, a new database backend.

Lei:
[36:00] To speed up state read and write, we have the cache state slots in the memory so that you enjoy the speed of your computer's memory, not your computer's SFE, which are indeed fast but not fast enough. And we have a whole new RPC infrastructure built by ourselves, by our engineers. It pushes data from the sequencer to the edge of the internet. In other words, some data center that is maybe 100 miles or less or closer to your home, so that your access to the blockchain, they all go through the RPC service, is fast because you are actually talking to a data center that is maybe five or 10 milliseconds away from you.

David or Ryan:
[36:43] Something we've seen, of course, in 2026 has been the rapid adoption of AI.

David or Ryan:
[36:49] You guys have a highly performant, I would imagine, AI-optimized chain. What are you doing to prep for this wave of AI agents and how do you think that's going to manifest?

Lei:
[37:01] Interesting question. So, yeah, I personally do use AI to code. And so I think one, and I also try to automate the company using AI. But I failed because

Lei:
[37:15] I have big trust issue. So for example, I, yeah, really. So I have big trouble trying to connect OpenClaw or any kind of cloud hosted AI to our company Slack, just because I don't want some other company or I don't want information to be transmitted to yet another company. I know Slack is cloud-based, so I'm kind of paranoid, but anyway, so I think the same paranoia can be applied to blockchains because if you think about AIs, they are interesting, they are great machines that can propose solutions that are 99% of the time perfect but 1% of the time catastrophic. So how do you make that work for your chain's users?

Lei:
[38:07] So my mental model has been to comparing AIs or AI agents with very talented intent solvers. They work very similarly. So we'll tell an intent solver in, say, an intent protocol, hey, please find me the best way to swap, say, USDC into Ethereum, into Ether. You care about a quote. And also, of course, you care about security. For example, the intent solvers should not be able to take your money away. But you do not really care about how they arrive at the amazing quote they actually materialize, right? I think same goes for AI. When you tell AI to code I think

Lei:
[38:49] People start to care less and less about what actual code was written. I don't think I check the diff AI works out anymore. I just care if it works, like if it kind of adheres to some kind of spec, I give the AI. So I think the same can be said for on-chain transactions. We envision that AI agents will help users make sense of contracts, hidden and public ones. And we expect that AI agents will help users to transact and to actually achieve their, say, financial goals or whatever they want to achieve, for example, swapping, right? So what we're working on is trying to put the necessary boundaries to AI agents. It is almost similar to intent protocols. We want a way for users to specify the end goal they have for their AI agents and also what the AI agents can do or cannot do. I'll just make an example, right? If I want to swap from, say, $1,000 of USDC to, I don't know, maybe 0.5, maybe 0.25 Ether,

Lei:
[39:55] I can state that this AI agent can at most withdraw this amount of USDC from me. And if they withdraw the money, they have to at least repay at least, for example, 0.5 Ether to the same address. and then the AI agents can go all crazy and do whatever they want as long as they do not break my constraints. So we're thinking about how we can optimize the chain for this kind of use models, kind of compartmentalization and adding restrictions to AI agents. And also we think MegaEath is a great place for AI agents to use as a playground because if you let AI agents go crazy, they burn a lot of tokens. They also have many failed attempts, right? So if you try to use AI agents to automatically send transactions on your behalf on an expensive chain, maybe the transaction cost they can add up. But on a chain like MegaEth, this is not an issue. So this is kind of a snippet of what we think about AI agents. We do have something that is very interesting that we're trying to announce next month. So yeah, stay tuned.

David or Ryan:
[41:04] Okay, we'll be on the lookout for that. One other thing that's relevant is the recent KelpDAO hack. And I'm wondering if you could test sort of a thesis David and I were playing around with, which is basically so we had KelpDow. Everyone's aware he's listening to Bankless. KelpDow was hacked. Some of the funds ended up actually on a layer two. It was the Arbitrum layer two in this case. They're stage one layer two. They decided to freeze the hacker's account, likely the Lazarus Group, and essentially reimburse the funds from the hacker. So steal from the thief in an act of, you know, I guess, retribution for the ecosystem. This caused David and I to be thinking about how L2s are going to, you know, take some form.

David or Ryan:
[41:52] And some of the idea is that the center may not hold here, where L2s will have to sort of make a decision as to whether they go fully decentralized, kind of stage two, we don't have the ability to do any of that. Or whether they implement processes and automation and stay with kind of like stage one and below, they maybe like automate freeze functionality, become a little more fintech in that role and in that way. And it's unclear really what users might prefer and every ecosystem might make a, different set of decisions on this trade-off landscape. What's your take on this? Has the events of KelpDAO, the arbitrage from freezing, some funds due to nefarious actors on the chain, has that changed your outlook

David or Ryan:
[42:42] for MegaEath and what it intends to do? Like, are you guys going full stage two or are you going to ease into that decision? What's the thought process?

Lei:
[42:51] It's a very hard question to answer. So I'll break that part. I think the KelpDAO hack itself it's more like a validation to my belief that centralized cross-chain transfers at some point they're going to break. It's just a matter of time. So I'm very happy that my conjecture was validated. Well, but it's really, really bad event. So yeah, it's really unfortunate. Then I think, yeah, I think the Arbitron freeze, I think it caught me a little bit off guard because first I was not really tracking the movement, the flow of the 30 money. So I was a bit surprised that it flew to, it went to Arbitron. I mean, I can, I totally understand

Lei:
[43:38] Why or how the team or the governance body made that decision because i mean everyone is supposedly living in some for sovereign countries and i think they are they are they are they are subject to the law and order of the sad countries so i think sometimes there is no option but to do certain things but i do think the beauty of blockchain the beauty of decentralization is this notion of, yes, like code is what we trust in ultimately, right? Code is the ultimate specification of how, say, smart contracts or say on-chain finance should behave. So I think there is some beauty in that. And in terms of whether MegaEath will go to stage two, I don't think we should make any promise as advised by our general counsel. But I would say personally, I find it a really promising, a really inspiring endgame for us or for any layer two, I would say. And I would even go as far as saying if you are building a layer two on Ethereum, if you do not want to be stage two, ultimately you are not ambitious enough.

David or Ryan:
[44:53] So did anything about the Layer Zero Kelp DAO event change your philosophy or direction about anything else? Or is it kind of just like, yeah, we had our attitudes about things prior and we're still going for them and no change?

Lei:
[45:10] Not really. And I can totally see how it can be a trick question because, yeah, we talked about our performance-oriented sequencer a lot, but like a centralization or monolithic sequencers does not really conflict with the goal of being stage two, right? It's all about having an immutable piece of code that validates the layer two state, sitting on the layer one and that code being the ultimate say of what can and cannot happen on the layer two. And I think, again, that's a really inspiring goal for every layer two. So I would say no. And actually, just funny enough, I was in New York and I was chatting with the founders of World WCM. So I was asking, so hey, if your end goal or even if your current architecture is to be fully on-chain in the sense that there is no backend server, supposedly you can also make your contract immutable. Of course, the current contract is not immutable because, yeah, God knows when you'll need to do an emergency upgrade, right? But Their goal is also to make their contract immutable. And I felt good. I think there was some good synergy between their thinking and our thinking. What I want you to say is with great power comes great responsibility.

Lei:
[46:36] I think layer twos inherently have more power than layer ones. And I think that's also the reason that the Abicham team faced a decision. And I think they took one particular option. So to me, my preference is I do not want the power. Yes, it's interesting that now you can arbitrate between returning the money or not returning money or not freezing the money. But I would rather not face that question because, I mean, who wants to be caught up to serve jury duty every other day,

David or Ryan:
[47:08] Right? That's a great answer.

Shuyao:
[47:11] I have a bit of more practical answer to this question. Yeah.

Shuyao:
[47:16] I think the incidents, first of all, made us very much alert of the application security. So we deployed two or three engineers, one of the business person to go to basically every single app and be like, yo, these are all the tools you guys should use to really do the homework and audit and have security rail guard. The second thing is we inserted a sequencer native monitoring tool with the security farm. So we're able to identify abnormally and anomaly ahead of the time to be able to alert, right, our application founders. And then the last one, we've hardened the security of the bridges. And that's both for our native bridge and also third-party bridge. So these are the things we've been doing behind the scenes for the last two months. In addition to, I think, with the goal of, you know, being immutable and then being very secure. And, you know, in preparation for this, I listened to a bunch of, you know, blockchain founders going on podcasts and all the layer one founders, you know, their opening line is like layer twos are bad. It's like how you justify your valuation, right? I kid you not. It's like, you know, even, you know, with DeFi United, our good friend Amin at Avalanche was like, oh, you know, we're contributing to Ethereum. I like the layer two. So I think it's our responsibility to correct the name for Layer 2's via both technical contribution and economic contribution. So yeah, I think security is like a forefront of all of these.

David or Ryan:
[48:45] Well, I definitely appreciate your guys' answers. You guys have absolutely no

David or Ryan:
[48:48] shortage of ambition on the mega ETH side of things. As we just bring this episode to a close, what are you guys doing on TGE Day and the day after and then the week after, just in the short term, what does a life in the day of the MegaEath team look like for the short term?

Shuyao:
[49:07] Yeah, the short term, our goal has always been so freaking consistent, which is supporting applications. We've done that for the last two years.

David or Ryan:
[49:17] Things do not change.

Shuyao:
[49:18] TGE, nor does it change a week or a month after TGE. Our applications require more go-to-market support. And by the way, we have three more Mega Mafia team that's going to come out a week after TGE. And then we have a big product launch in May as well. So, you know, I write this weekly memo to the company every single week. And to me and the entire firm, my message has always been like, you know, TGE day is day one. Now the baby is out. Everybody's watching you. Every single thing you do has an impact that's just straight in front of your face. Nothing has changed for our company. We have new product launching. We're very excited about AI. We don't talk about it because I think talking without showing anything substantial is cheap these days. So yeah, I hope our action can speak for itself.

Lei:
[50:10] Yeah, I have a different version. So I would take a good nap on the weekend and I will make an e-ink dashboard showing mega token price and I'll hand it in front of my desk. And yeah, and I'm just, yeah, and probably onto the next project, probably onto the next product. So I think our engineering team has been sprinting for so many weeks tirelessly. Yeah.

David or Ryan:
[50:41] Yeah, I think everyone is looking forward to work on a new,

Lei:
[50:45] Fresh set of problems because I think we do have a culture of being tireless as long as there are interesting problems to solve.

David or Ryan:
[50:52] Well, as a mega ETH token holder, I do like the idea of you having the price of the token on your desk at 24-7.

Lei:
[50:59] Good motivation.

David or Ryan:
[51:01] Be prepared for some ups and downs. Shouya, Lei, thanks for coming on. Congratulations to getting to the starting line. I wish you guys a good race.

Shuyao:
[51:10] Thank you guys Thank you so.

David or Ryan:
[51:11] Much Bankless Nation You guys know the deal Crypto is risky You can lose What you put in But nonetheless This is the frontier It's not for everyone But we are glad You were with us On the Bankless journey Thanks a lot
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