Overview
Chaos Labs tentatively supports the deployment of an Aave instance on MegaETH, contingent upon an additional analysis performed on mainnet data and an adequately developed price feed infrastructure. This report provides a detailed examination of MegaETH’s technical specifications and the associated risks.
Technical Architecture
MegaETH is an EVM-compatible L2 that delivers millisecond-level response times under heavy load, high transaction throughput, and abundant compute capacity. Designed to bridge the gap between traditional cloud computing and blockchain performance, MegaETH enables sophisticated applications that require rapid updates and real-time feedback loops.
Node Specialization
In the MegaETH blockchain architecture, node specialization fundamentally restructures the traditional operational model by assigning distinct roles to different node types, each optimized for specific tasks. This specialization includes sequencers, replica nodes, full nodes, and ZK prover nodes. Sequencers are responsible for transaction ordering and initial execution, rapidly processing incoming transactions to ensure minimal latency. Replica nodes, on the other hand, focus on applying state diffs transmitted by sequencers, updating the blockchain state without re-executing transactions. Full nodes re-execute transactions for independent verification, maintaining network integrity, while ZK prover nodes generate cryptographic proofs that validate state transitions, providing an additional layer of security through proof-based verification.
The node specialization allows for differentiated hardware requirements. Sequencer nodes, handling the bulk of computational tasks, operate on high-end servers to maximize performance, whereas replica nodes require less powerful hardware due to their limited role in verifying proofs. Full nodes benefit from auxiliary information from sequencers to re-execute transactions efficiently, ensuring trustless validation. This approach not only enhances performance but also ensures that the hardware cost remains proportionate to the node’s function
megaETH Architecture
The EigenDA in MegaETH ensures that when a sequencer produces a block, it must submit the associated data to the DA service. This service verifies that the data is received and makes it publicly available, providing a receipt to the sequencer. EigenDA is a data availability solution built on EigenLayer. By efficiently managing blob storage, offering a high write throughput of 15MB/s (up to 654,000 TPS with compression), and enforcing security through a slashing mechanism, EigenDA offloads data availability constraints, enabling rollups to scale while preserving Ethereum’s trust guarantees.
MegaETH introduces two distinct types of blocks: mini blocks and EVM blocks. EVM blocks are standard across Ethereum-compatible blockchains. In contrast, mini blocks are unique to MegaETH. Mini blocks are streamlined versions of EVM blocks, containing a concise set of metadata fields to reduce the data footprint. They operate on a rapid schedule, being produced and preconfirmed by the sequencer at intervals as short as 10 milliseconds, allowing up to 100 blocks per second. Unlike EVM blocks, which can be bulky due to their comprehensive headers designed for longer block times, mini blocks optimize for compactness and speed, reducing the overhead on network resources and storage, particularly on mobile devices. Each transaction processed by the system is recorded in both a mini block and an EVM block, ensuring thorough documentation and consistency.
Hyper-Optimizing the EVM
MegaETH’s Hyper-Optimized EVM Execution is designed to fully utilize modern hardware by eliminating software inefficiencies that traditionally limit blockchain performance. While CPUs, SSDs, and high-speed networks are capable of supporting 100K+ TPS, existing EVM implementations fail to leverage these resources due to bottlenecks in state updates, storage access, and execution overhead. The biggest constraint is updating the Merkle Patricia Trie (MPT), which currently accounts for over 90% of block production time in Ethereum clients like Reth due to excessive random disk I/O. MegaETH overcomes this by introducing a novel state trie optimized to minimize disk operations and maintain light client compatibility.
Beyond state optimizations, MegaETH also addresses computation inefficiencies in the EVM. Standard execution relies on bytecode interpretation, which introduces significant overhead by requiring multiple instructions for even simple operations. To overcome this, MegaETH implements Just-In-Time (JIT) compilation, which translates EVM bytecode into native machine code at runtime, reducing CPU instruction complexity and achieving up to 100x speed improvements for compute-heavy smart contracts.
Additionally, parallel execution is introduced to maximize CPU utilization—unlike existing solutions like Block-STM, which suffer from cascading aborts in high-contention workloads, MegaETH’s centralized sequencer enables the use of non-deterministic concurrency control algorithms, ensuring efficient, scalable parallel execution across 100+ CPU cores.
Decentralization
MegaETH operates with only one active sequencer, which reduces consensus overhead but introduces centralization risks, such as creating a single point of failure. To mitigate these risks, MegaETH team states that they will employ a two-fold strategy: first, it rotates among approximately 15 different sequencers operated by various entities. Second, each sequencer has a slashable economic stake on the Ethereum mainnet, providing a financial disincentive for any form of misbehavior or censorship. Additionally, to address liveness concerns, MegaETH maintains a passive sequencer ready to take over should the active one fail.
Market & Ecosystem
MegaETH is currently in the testnet phase and has not launched on the mainnet yet. According to MegaETH’s proposed schedule, the testnet deployment began on March 6th, with an initial phase dedicated to onboarding apps and infrastructure that lasted until March 10th. Starting from March 10th, MegaETH began onboarding users to further test the platform. However, after launching, the system experienced a downtime caused by an edge case in its custom-developed RPC stack. Afterward, the team acknowledged the issue and announced plans to enhance the robustness of MegaETH’s infrastructure going forward.
MegaETH Official X Account
Popular projects on MegaETH include Valhalla, GTE, CAP Labs and Teko Finance. Valhalla is a perpetuals exchange built on MegaETH, which completed a $1.5M pre-seed funding round at the end of 2024. GTE is a DEX built on MegaETH, known for offering real-time, low-latency trading. CAP Labs operates a stablecoin engine that utilizes a decentralized network of specialized operators to access external yield sources. Each denomination of stablecoin at CAP has two forms: interest-bearing and non-interest-bearing. The former earns yield through agent strategies and grows in value, while the latter remains pegged to its denomination. Teko Finance is a lending protocol built on megaETH. Its features include micro-liquidation, leveraged strategies and under-collateralized borrowing.
Currently, Uptime MegaETH and MegaExplorer are the two available block explorers for MegaETH.
Oracles
As the time of this writing, appropriate oracles on MegaETH are unavailable. Consequently, we recommend delaying the deployment of Aave on MegaETH until sufficient oracle infrastructure is established to ensure accurate asset pricing.
Assets and Listing Parameters
Since MegaETH is still in its early stages and has not yet launched on the mainnet, we are unable to obtain any information on key assets within the ecosystem, including supply, DEX liquidity, and bridging. Chaos Labs will continue monitoring MegaETH and, upon mainnet launch, will provide updated assessments and recommendations on the ecosystem, proposed listing assets, and listing parameters based on real-time data.