The public sale of the MEGA token for the Layer 2 project, MegaETH, has raised over $1.18 billion in commitments. However, the enthusiasm has been overshadowed by concerns about the process’s fairness. The analytics firm Bubblemaps detected potential Sybil activity in MegaETH, suggesting manipulation.
The auction launched on October 27 via the Sonar platform. It offered 500 million MEGA tokens, equivalent to 5% of the total supply. The sale was oversubscribed in just five minutes. Participants could bid between $2,650 and a maximum of $186,282 per person. Data from Arkham Intelligence reported 819 wallets committing the maximum in the first two hours. In total, over 46,000 users participated, with an average bid of $25,500.
MegaETH presents itself as a high-performance, EVM-compatible blockchain. It promises sub-millisecond latency and over 100,000 transactions per second. The enormous demand highlights the market’s interest in Ethereum scaling solutions. Nonetheless, the incident highlights a critical vulnerability in token sales. Public auctions aim for fair price discovery but remain susceptible to capital concentration.
Was the Presale Manipulated by a Single Whale?
The controversy centers on Bubblemaps’ revelations. The firm identified at least 20 entities using multiple wallets to bypass the limits. A clear example was wallet 0x9f5c. It split funds from Kraken into three new wallets, bidding $600,000 in total. In a follow-up, Bubblemaps exposed a much larger operation. They traced $5 million in investments back to a single participant. This entity used over 20 linked addresses for the auction.
Bubblemaps traced wallet 0x5D8, which distributed ETH to 159 new wallets in February. Of those, 26 participated in the MEGA sale, committing $5 million. This is 26 times the allowed limit. Bubblemaps offered to help the MegaETH team identify these wallets. This event underscores the urgent need for better verification standards. The credibility of future token launches depends on it.
