Bankless - MegaETH Token Launch with Co-Founders Shuyao and Lei

Episode Date: April 30, 2026

$MEGA token is live, but the bigger story is what the launch says about the future of L2s. Co-Founders Shuyao and Lei join Bankless to unpack why MegaETH tied its TGE to app milestones, why USDM and proximity markets could become core revenue streams, and how the team is thinking about appchains, AI agents, security, and Stage 2 decentralization. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔮POLYMARKET | #1 PREDICTION MARKET https://bankless.cc/polymarket-podcast 🟦 COINBASE ONE | GET 20% OFF https://bankless.cc/coinbase-one 🧭OKX | TRADE, EARN, PAY https://app.okx.com/join/USBANKLESS 🦊 METAMASK | DOWNLOAD NOW https://go.metamask.io/BL-Pod-Download 🌐BRIX | EMERGING MARKET YIELD https://bankless.cc/brix 💰NEXO | YIELD + CREDIT LINE https://bankless.cc/nexo --- TIMESTAMPS 0:00 MegaETH Reaches TGE: KPIs and Milestones 3:10 The 10 Apps That Unlocked Launch 8:12 Composability for New Crypto Apps 11:22 World Markets as MegaETH’s Liquidity Hub 14:13 USDM and the First Revenue Stream 15:59 Co-Location, Low Latency, and Proximity Markets 19:40 Proximity Markets vs. MEV 22:13 Revenue and Token Value Accrual 25:15 Ethereum Decentralization as a KPI 27:40 Token Unlocks and Launch Supply 30:31 Terminal, Incentives, and Flux 32:28 MegaETH vs. Appchains 38:31 Could MegaETH Support Polymarket Scale? 41:12 AI Agents on a Fast, Cheap Chain 47:23 KelpDAO, Arbitrum, and L2 Decentralization 55:38 Life After TGE --- RESOURCES Shuyao Kong https://x.com/hotpot_dao Lai Yang https://x.com/yangl1996 --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Station, we are here with Shuiyao and Lay two of the three co-founders of Mega-Eath on the day of their token launch. Big day. Are you guys, you guys nervous? Yeah, so we shouldn't suppose 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. 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 like kind of like private token sales. You guys did an echo sale. You guys did an NFT sale. And so there are some like token holders out there that are awaiting the TGE. And then they're really the thing that the Mega-Eath 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? I'll throw this one to you to start. 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 is 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 weird feeling I have because they're like

just sound so strict, but they're really celebratory milestones instead of KPI's. 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 MAGA.

And that's why we set the KPI and then basically hold everyone accountable, right? 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 like integrate and going live on main net. So now it's the original philosophy of KPI, which is like, game is different. Let's do the best of our work. That's why and how we can prove mega deserve to exit.

I can go deeper into how we set up the three KPI if you want to, but I will pause here. Yeah, the KPI that was checked, the box that was checked, was the 10 apps that are live on Mega-Eath. But to my understanding, there are, this is 10 unique apps, not just like another AVE deployment

or like another Uniswap deployment. So talk to me about the 10 apps. We 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, AVE, much respect to AVE, AVE, did not count. Talk to me about that, like, philosophy.

Defy United. Okay. Our criteria has always been very simple, which is megaEath brings out a 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 possible. 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 Dexis also need to differentiate themselves. So we work with the World Market Team to create this fully on-chain decks. And, you know, they don't have backend.

The protocol is their backend. And anyone can deploy front-end. That's something we're really excited because it's, you know, it's only possible on Mexico. I used to cheesy time Omega. And then if we consider, you know, the type of wordmark, which is fully on-chain decks,

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 decks. And then we also have a bunch of what I call them the left curve apps. The left curbs apps are really the goal is to bring an 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.

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It's already on your phone or in the link below. Is that because, I mean, in Defi, the cool thing is we're composable. Uniswap plugs into Avey, which plugs into like the next app. And, you know, that's something that every single chain has, 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 maker is in the back end of that that connected 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. Am I onto something here? 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 Hit 1 and WCM. I think you can draw

very interesting parallel to how traditional finance markets form. So you have Nizzi and NASDAQ of the world, and then on top of them, you have brokers that face the retail, for example, Robin Hood. So a kind of a 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 Megaheth, Hitwan is one such brookers. broker that caters to people who wants to probably, I would say, YOLA 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. And in some sense, they are kind of a proxy or they're kind of a broker, 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 defy composability, but with landing being bootstrapped right now, we also expect to see just the normal defy composition, between landing and yield-bearing tokens and stuff. So, yeah, I found it to be quite exciting.

So, yeah, you're right on the point. Yeah, WCM World Markets. This is a project on Mega-Eath 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 at Eath has the room for it. And because it puts like, Shudia, you mentioned that the whole state of world markets is on chain. Like there is no back end. The back end is mega Eath. 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 app operating as infrastructure for the rest of the megaEath apps? So, like, Lay, 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 on world markets, as I understand it. So it seems to be 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. Like you guys are both not in your head. Is that kind of how it's shaping up to be? Yeah, 100%. And this is where I think composability really shines because if you, yes, you can, of course, build say hit one and the bricks each as an app chain as an app chain, as an app chain.

But then liquidity between the two apps would not interplay, right? And yes, you can have. I think nowadays cross-chain transfers are becoming. becoming faster and faster. But I think a few weeks ago, we just saw 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.

Just a liquidity hub. It's a central liquidity. Exactly. It's like a hub of liquidity on mega-eat and, yep. Let's talk about M-U-S-D. Every single app that I've talked to so far, Euphoria users. USCM, excuse me, USCM, the Mega-Eath native stable coin, is every single one of the apps that the 10 apps, the 10 out of the 10 apps that

unlocked the TGE, they are all integrating USDM? 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 stable coin 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 stable coin. that gives everybody comfort and ease of familiarity to use USGM. But in the meantime, USGM, 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 MAGA 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. And part of this was downstream of the fact that the whole point of Mega-Eath is to, like, not charge chain fees, right? And so because Mega-Eath has such high throughput, the chain fee revenue model is kind of just borked from the get-go, right?

Exactly. Yeah. Yeah. Okay, so that's one of the two revenue models that I'm aware of, USCM, 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.

Yeah, the co-location article is the collocation protocol, sorry, not Oracle, 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 monies are 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 service 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. And mega-eith 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. And if you put that with in 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 mega-eth, because we have 10-minute second block time, suddenly the network latency becomes much more important. 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 amount 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 or Maggie,

if they do not need to hire a like 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. Lay, this idea of co-location in this revenue model, how would you compare this to sort of MEV?

Is this essentially like block ordering? Yes, well, it is very similar to MEP, but we're taking a very different approach. I think MV is trying to do microscopic auctions in a 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 somewhat doable, but I do know that I think even Ethereum layer one is trying to reduce the block. lot 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, say, physical, they compete on physical time, for example, time to finish and order time to kind of to compute

and response to a market event and of course competition between the different tiers of the proxently market. So this is kind of the slightly different approach we're taking. But overall, yes, this is kind of

taking, it's kind of making profit from the same pool of money as MEP 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 searches 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, by adding random jitters. 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 Meghithe and what you guys or launching here is that many blockchains don't think about their business model, have never thought about their business model, but Mega-Eath 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? Yeah, I think getting business model right was when we started Mega,

we were like, okay, 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 depending on, you know, what my general counsel tell me, what I would, what I'm super clear is, The dollar that mega takes home, right, whether it's from proximity market 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 token. So everyone,

I think the mega token is so beautiful because it just aligns people who are naturally not aligned. historically, right? The retails are complaining the VC's dumping on them. The VC is saying, Hang out 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 solitaire. Look, we give retail allocation at very low valuation.

Look, this thing has a revenue stream. And look, everybody earned token by, you know, staking. to earn KPI. And look, by the way, we love Ethereum so much that one of the KPI 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. You said one of the KPI's is Ethereum decentralization. What is that for those not familiar? Like, what are you measuring there? I can share the rationale because we are, are an Ethereum layer two, and we took performance tradeoff. 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. So the two business models that I see out of Mega-Eath, one is the MEV markets, which I see, like, you guys have a not a decentralized. blockchain, but 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 MEAEth. 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. Stable coins aren't like technically fundamental, but in 2026, we look at stable coins on all the chains. And it seems like if you are an alive blockchain, you have an live stable coin 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 Meggie? Is this kind of are these the two that I should focus on? 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 a revenue within the ecosystem, right? I think the chain team should be a bit restrained, I would say, so that there's an vibrant app ecosystem. They can get their fair share. 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. But yeah, no detail to share right now. Let's get into the actual TGE details. So TGE tokens alive in trading. I'm an investor in the presale. I think I have a one-year lockup. So whose tokens are trading?

Who have the who's the first party of people that gets their tokens and like what's the supply? And so like talk to me about like 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? I think our token is like super transparent. I think to start with, everyone had a cost base. Everyone who gets mega, invest in the mega. There is zero air drop farming.

I think when we started this noirdrop farming, we got basically hated by everyone. People thought we were being arrogant or some sort. But I think now looking back, it was just a right decision. There's no hidden air drop, right? As we all know, a lot of teams play around with their tokenomics. That's just like, doesn't happen with us.

So day one, we have obviously the fluffle and the ICO, those people who chose not to log. We actually surprise unlog, 20% of echo participants. It's funny, we have this telegram group called the People's Chat. And then we have all of our just different phase of ICO investors. A lot of them were like, oh my God, like Echo Bros, we invest so early, where is 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 online. So we decided to unlock 20% of them. So at least people can get some of their money back. 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 term for longer time for a better terms, 20% of those are also unlocked. And those are the two pools of people that are unlocked day one.

And then also the ICO participant who chose not to lock. Okay. 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? Okay.

Correct. The first is Echo. Versus Echo. Okay. What's the total supply of the tokens that'll be online at the end of the day? Do we know this? You can't do the math. The math is pretty straightforward.

Okay. We'll leave that to the listener to be curious. No, we'll have Claude do the math after. We'll have Claude do the math. Yeah. 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 air drop? What are the next milestones that anyone interested in token should know? Yeah, I mean, we're recording on Tuesday. So we just announced our photo, which is called Terminal today. And the goal is to surface applications that's being built our 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, air drop 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 application. 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 done their audits, if not just one audit. We know the people, we make sure that, you know, they're real. And then we were able to like go to market with them.

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 alive on Thursday. And it's basically allowing people to participate into our KPN. 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 where we're launching. So it seems to me that mega ether 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 theirdrop 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, 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, 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-Eath, 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 mega-eth 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 rule 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 Megaheath? And what are the tradeoffs there? 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 and can host many apps and to have the, 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 Mega-E that are striving 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. and we just keep asking ourselves, can we cultivate a cohort of applications such that when new applications are kind of shopping and around for chains to build on, they can immediately recognize that, okay, hey, Megaith 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. I, Shurya 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, 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 unramping, off ramping, bridging, security, getting the servers, paying for the servers, thinking about gas tokens and, yeah, and all sorts of stuff, right? So RPC, for example, it's, I think each individual ticket is not a big effort, but combined, And 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 compulsibility or cross-chain transfers, however you want to call it, I think there are fundamental limits. 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 modelit 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 up. keeping 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. Yep. So I think there are pros and costs. It would make it if you 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 a 5x or 10x that. Does Megaeth support that? 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 Megaheth can host some 300 polymarket instances right now. 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, the mega-eaths?

architecture and short-cut. Yeah, what's the secret sauce, the X-Factor? Yep. So, yeah, actually not too much secret source, more like an interesting architecture. So as you mentioned, we have a few very beefy sequencers that process transactions, and that saves us a lot of, say, 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 Mercur 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 10x faster, if not more than the banana data structure. And then optimizations here and there, for example, a new database, a new database

backend 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 SFT, 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 data center that is maybe five or 10 milliseconds away from you.

Something we've seen, of course, in 2026 has been the rapid adoption of AI. you guys have a highly performance, 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? 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 I have big trust issue. So for example, So I, yeah, really. So I have big trouble trying to connect OpenCla 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 to blockchains. Because if you think about AI, there are, there are. are interesting, there 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? So my mental model has been to comparing AI's or AI agents with very talented intent solvers. They work very similarly. So we'll take. 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 their 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, 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 set for on-change 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 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 just make an example, right?

if I want to swap from say a thousand dollar of USDC to I don't know maybe 0.5 maybe 0.25 ether I can set I can state that this AI agent can at most withdraw this amount of USC 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 my constraints.

So we're thinking about how we can optimize the chain for this kind of use models, kind of compartmentization and adding restrictions to AI agents. And also we think Megaith 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 Chanak. on your behalf, on an expensive chain, maybe the transaction cost they can add up.

But on a chain like Megaheth, 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. Okay, we'll be on the lookout for that. When the market pulls back, most people just wait. They hold cash, hoping things stabilize.

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Bricks brings DeFi's promise to the emerging world and brings the emerging market yield to your wallet. Let the yield flow with Bricks. One other thing that's relevant is the recent kelp-out. 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 Kelped Dow. Everyone's aware. He was listening to Bankless. Kelpdao was hacked. Some of the funds ended up actually on a layer two. It was the arbitram layer two in this case. They're stage one layer two. They decided to freeze the hackers account,

is it likely the Lazarus group, and essentially reimburse the funds from the hackers. 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. 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 tradeoff landscape. What's your take on this? Has the events of Kelpdow, arbitrage from freezing, some funds due to nefarious actors on the chain.

Has that changed your outlook for Mega-Eath 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? It's a very hard question to answer. So I'll break that part. I think the KelpDal hack itself is 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 contracture 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 dirty money.

So I was a bit surprised that it flew to, it went to Arbitron. I mean, I can, I can, I totally understand why or how the team or the governance body made that decision. Because, I mean, everyone is supposedly living in some for-solving countries. And I think they are, they are, they are, they are, they are subject to the law and order of the set countries. So I think sometimes there's 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 Megaeth 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. So did anything about the Layer Zero Kelp Dow 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? Not really.

And I can totally see how it can be a trick question because, yeah, we thought about our performance oriented sequencer a lot. But like 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 an 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 asked, asking if I was asking so hey if your if your end goal or even if your current architecture is to be fully on chain in a sense there in the sense that there is no backend server supposedly you can also make your contract immutable of course their current contract is not immutable because yeah god knows when you need to do an emergency upgrade right but their their goal is also to make their contract immutable and I felt 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.

I think layer two inherently have more power than layer ones. And I think that's also the reason that the arbitrage team faced a decision. And I think they took one particular option. 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, right?

That's a great answer. I have a bit of more practical answer to this question. I think the incidents, first of all, made us very much alert of the application security. So we deployed two or three engineer, one of a business person to go to basically every single app and be like, yo, these are all the tools you guys are used 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 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 scene 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, I, in preparation for this, I listen 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 violation, right? And I kid you not. It's like, you know, even, you know, with Defyte United are a good friend of me, and that Avalanche was like,

oh, you know, we're contributing to Ethereum is unlike the layer two. So I think it's our responsibility to correct the name for layer two by both technical contribution and economic contribution. So yeah, I think security is like a forefront of all of these. Well, I definitely appreciate your guys as answers.

You guys have absolutely no shortage of ambition on the mega-eathe side of things. As we just bring this episode to a close, What are you guys doing on TGEE Day and the day after and then the week after, just in the short term? What is the life in the day of the Mega-Eath team look like for the short term? Yeah, short term, our goal has always been so freaking consistent, which is supporting applications. We've done that for the last two years. Things do not change TGE, nor does it change a month, a week or 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 TGEE. 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 days, 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 is changed for our company. We have a 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, hope our action can speak for itself.

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, I think everyone is looking forward to to work on a new fresh set of problems because I think we do have a culture of being tireless as long as there are interesting problems to

off. Well, as a mega-eath token holder, I do like the idea of you having the price of the token on your desk at 24-7. That is a good motivation. Be prepared for some ups and down, so. Shia Lay, thanks for coming on. Congratulations to getting to the starting line. I wish you guys a good race. Thank you so 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.