MegaETH is tackling rising network costs by introducing USDm, a new stablecoin built in collaboration with Ethena. This launch is to realign incentives, reduce gas fees, and boost ecosystem growth.
According to the announcement, USDm is tailored specifically for real-time applications on MegaETH. It works seamlessly with wallets, apps, and on-chain services to make payments smoother. Most Layer 2 (L2) networks depend on additional margins from sequencer fees, which can sometimes create friction between the chain and its ecosystem.
As fees continue to climb in an effort to protect profit margins, user activity tends to slow down, which in turn limits growth. MegaETH has a unique solution to this problem. Instead of charging user fees, it uses stablecoin yield to support its operations, doing away with the need for margins.
Co-founder Shuyao Kong emphasized the benefits of the launch, stating, “USDm means lower fees for users and a more expressive design space for applications. We are excited to work with Ethena to enable a win-win scenario for all stakeholders in our ecosystem.”
How USDm Powers the Network
USDm v1 is issued through Ethena’s USDtb stablecoin rails, backed primarily by BlackRock’s tokenized U.S. Treasury fund (BUIDL) via Securitize. This provides transparent reserves and predictable yields. Additionally, the system allows flexible collateral, enabling MegaETH to adjust the reserve mix over time.
The yield generated from these reserves covers sequencer operational costs. Hence, MegaETH can keep gas fees low and stable while growing sustainably. Moreover, predictable sub-cent fees make it possible to launch entirely new product categories that require ultra-low costs.
Ethena’s Rapid Growth
Ethena comes with experience as the driving force behind USDe, which stands as the third-largest USD-denominated crypto asset, with a total value locked (TVL) of $13 billion. Its USDtb stablecoin has already circulated $1.5 billion and is on a path to meet compliance standards set by the GENIUS Act.
MegaETH and Ethena have created a system that uses stablecoin earnings to keep network fees steady while supporting long-term growth.
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