Bankless Podcast Summary

Episode Title: MegaETH Mainnet is Live! — The Next Era of Ethereum Scaling
Date: February 9, 2026
Host: Bankless
Guests: Namek & Lei Yang (MegaETH)

Episode Overview

This episode dives deep into MegaETH's mainnet launch, exploring the future of Ethereum scaling through Layer 2 innovation. The discussion is driven by the recent release of a pivotal Ethereum Layer 2 tweet from Vitalik Buterin, situating MegaETH within this evolving ecosystem. The guests, Namek and Lei Yang, discuss their scaling achievements, the philosophical shifts in Ethereum's roadmap, MegaETH’s technological breakthroughs, business model, app ecosystem, and broader implications for crypto’s next growth era.

Key Themes & Insights

1. Ethereum Layer 2: Shifting Paradigms

• Reaction to Vitalik’s Layer 2 Manifesto
  • The hosts and guests reflect on Vitalik’s “Layer 2 tweet,” viewing it as validation and as a major roadmap pivot for Ethereum.
  • Quote (Namek):

    “The reason why Mega uses Ethereum is not because of fanboyism, but because it allowed us to build the most performant possible blockchain... Ethereum gives a guarantee of sorts. It's the most decentralized, turn complete blockchain.” (01:03)

  • Lei on Differentiation:

    “It’s pretty uninteresting to try to build and replicate exact primitives provided by the layer one... it’s technically uninteresting in an academic sense.” (03:38)

  • Barbell Strategy: Ethereum anchors decentralized, secure value, while Layer 2s like MegaETH push radical scalability and unique features.
  • Community Shift: Early assumptions around rolling L1 activity to L2s have evolved. Now, L2s are differentiated products rather than just L1 clones.

2. MegaETH’s Scaling Achievement

• Mainnet Stress Test Results
  • MegaETH sustained up to 55,000 transactions per second (TPS) during their recent stress test—orders of magnitude beyond L1 capabilities.
  • Users played latency-sensitive games in real time with zero UX trade-offs, thanks to MegaETH’s ultra-low-latency architecture.
  • Quote (Namek):

    "We did 11.4 billion transactions in 7 days... average TPS was 15.5k per second. Peak TPS was 55k." (34:13)

• Innovation: New State Trie Design
  • Major technical leap: “SOD” (Small Authentication, Large tries)—a unique state trie that replaces Ethereum’s Merkle Patricia Trie.
  • This innovation drastically reduces state management overhead by storing the data structure in active memory, allowing real-time, low-fee, high-throughput execution.
  • Quote (Lei):

    "What we did is we completely redesigned the data structure... It takes so little space that you don’t have to constantly update your database... you can just fit it in the main memory." (40:56)

3. Layer 2 Security, Property Rights, and Staging

• Security Guarantees
  • Users on MegaETH inherit Ethereum’s security, plus rely on Eigen DA (data availability).
  • Censorship resistance mechanisms allow transactions submitted via L1 to be forcibly included on L2 if needed.
  • Asset Exits: Users can always exit L2 and reclaim assets on L1, with fraud proofs, ZK proofs, and other safety mechanisms.
  • Quote (Lei):

    “If your transactions are being maliciously excluded... you can always go back to the layer one and submit the transaction there and the layer two sequencer will be forced to include it.” (17:02)

• Stage 1 vs Stage 2 Debate
  • Most rollups stay at Stage 1: still governed by upgradeable contracts (Security Council).
  • True “Stage 2” (immutable, governance-free contracts) is extremely hard, perhaps a decade away; users may even prefer some governance flexibility for bug fixes.
  • Quote (Lei):

    "Stage two basically says get rid of the Security Council; code is to govern you for life... It's a big risk." (22:09)

  • Host’s Take:

    "It’s unclear whether I as a user actually want stage two... Do I trust the Security Council more or trust there won’t be bugs?" (25:16)

4. Business & Economic Model: Beyond Blockspace Fees

• Chain Fees are Unsustainable
  • Running mainnet at stress-test throughput costs $1.1M+ for 11B txs—a model incompatible with fee-based revenue.
  • Quote (C):

    “Chain fees is not a viable business model for Mega Eth... where is it going to come from?” (47:44)

• Primary Revenue: Stablecoin Float/Yield
  • MegaETH issues native stablecoin USDM; collects yield from TVL (total value locked), following a model similar to OpenAI’s approach to LP tokens.
  • Focused on building real businesses via fee capture in apps and transaction volume, not from users directly.
  • Quote (Namek):

    “The way Mega makes money is via these people yields. It doesn’t hurt apps, it doesn’t hurt users.” (52:15)

• Secondary Revenue: Auctioning MEV/Sequencer Co-Location
  • MegaETH runs proximity markets—selling privileged access to low-latency block ordering through periodic auctions for server co-location.
  • Transparency over under-the-table value extraction as often occurs in other L1s (e.g., Solana).
  • Quote (Lei):

    “Every month or every week... we run auctions to decide a bunch of people that will have the seat to co-locate with the sequencer.” (53:03)

5. MegaETH App Ecosystem & Incubator—“Mega Mafia”

• Deliberate, Proactive App Development
  • MegaETH rejects “credible neutrality” in favor of direct app incubation and partnership.
  • Incubates and funds founders to build unique, “impossible elsewhere” applications, including permissionless games, DeFi, consumer lending, etc.
  • Quote (Namek):

    “We cannot end up in a situation where we just have a bunch of repeat applications that exist on every other chain... we need to be proactive.” (62:56)

• Incubator Structure
  • Early approach: facilitate founder entry, no equity or token demands, focus on usage of native stablecoin for value capture.
  • Now: More targeted, matching $USDM alignment with investment and support on a case-by-case basis.
  • Quote (Namek):

    “The ask right now is to use USDM... we’ve helped source some liquidity and ensure MVP motion.” (67:53)

• “Mega Mafia” as Accelerator
  • Described as an accelerator supporting applications that, in turn, grow MegaETH’s AUM and network effect.

6. Anticipating the Agent Era

• AI Agents as Next Users
  • MegaETH team views ultra-cheap blockspace and API architecture as uniquely suited for future agent-driven economic activity.
  • Low transaction costs and flexible sandboxing make the chain ideal for programmatic/A.I. experimentation at scale.
  • Quote (Lei):

    “Agents have unlimited energy to do what humans do not... being cheap enough for agents to work with is key.” (72:37)

7. Token Model & Community Ownership

• No Airdrops—Direct, Public Ownership
  • MegaETH prioritized open, public sales—NFTs, Echo, and Sonar launches allowed users to buy at similar terms to early VCs, radically increasing retail owner participation.
  • Quote (Namek):

    “Crypto is unique because a lot of users want to be owners as well... if the potential users want to be owners, they can be owners.” (76:30)

Notable Quotes & Memorable Moments

• On the Barbell Model:

  “I think Ethereum and the EF need to take Ethereum’s success into their own hands and understand L2s are trying to build businesses or valuable products... institutions as L2s like that trade-off.”
  — Namek, (09:41)

• On the Technical Breakthrough:

  “We completely redesigned the data structure... now it’s just a very quick memory read. That’s one of the secret sauces: a complete revamp of the Ethereum Merkle trie data structure.”
  — Lei Yang, (40:56)

• On Scale Realism:

  “It’s actually pretty easy for you to build a chain that's cheap when no one’s actually using it... it's actually pretty hard for you to sustain that when you’re pushing to 15,500 TPS.”
  — Lei Yang, (37:29)

• On App Incubation:

  “There’s just not enough founders in crypto... It’s less about isolating founders than not even having founders. The day of being hands-off is really over.”
  — Namek, (67:53)

• On New Era of Blockchain Users:

  “All the bad UX for humans becomes actually good UX for agents... and you have abundant cheap blockspace and agents starting to come online.”
  — (70:50)

• Host’s Closing Words:

  “We know MegaETH transactions are going to be cheap, cheap, cheap. This is the frontier. It’s not for everyone, but we’re glad you’re with us.”
  — Host, (81:11)

Timestamps for Key Segments

• 00:00 — MegaETH’s scaling milestone: 55,000 TPS, zero UX tradeoffs.
• 01:03–04:31 — Reaction to Vitalik’s Layer 2 tweet and Ethereum roadmap evolution.
• 07:42–12:19 — Pivoting the rollup-centric roadmap & L2's role.
• 17:02–21:10 — Security, property rights, and user guarantees on MegaETH.
• 22:09–27:36 — Stage 1 vs Stage 2: tradeoffs, technical risks, and community expectations.
• 30:34–38:51 — Stress test deep dive: methodology, numbers, technical validation.
• 40:43–45:27 — Secret sauce: new state trie design and EVM compatibility.
• 47:44–53:03 — MegaETH's business model: stablecoin yield & sequencer co-location auctions.
• 62:19–67:53 — App ecosystem: Mega Mafia incubator, philosophy, and structure.
• 70:50–75:52 — Next billion users: AI agents, sandboxing, and crypto usability.
• 76:30–80:17 — Token distribution, public ownership, and comparison to historical web3 projects.
• 80:47–81:11 — Looking forward: launching apps, ecosystem building, and concluding notes.

Conclusion

MegaETH’s mainnet launch represents a pivotal step in the next era of Ethereum scaling—one focused on maximal performance, business model innovation, and proactive ecosystem building. The episode captures both the philosophical and technical “pivot” happening across the Ethereum community and spotlights MegaETH as a forerunner among second-generation Layer 2s. If you want to understand how the Ethereum scaling wars are progressing and what’s at stake for the next generation of blockchain apps, this episode is a must-hear.