MegaETH Buys Back Equity from Early Investors: The Block

According to a report in The Block, upcoming high-performance Ethereum Layer-2 MegaETH has repurchased 4.75% of company equity and token warrants from its early pre-seed investors.

What’s the Scoop?

• Strategic Buyback: The repurchase, covering both equity and token-linked warrants, was completed this summer at an undisclosed higher valuation than the company’s seed round, which raised $20M at a “nine-figure” valuation.
• Timing Before Mainnet: The move comes just ahead of MegaETH’s mainnet and token launch, expected before the end of the year. Buybacks of this kind are typically conducted post-launch, making this preemptive action unusual.
• Buy Back Rationale: Some pre-seed investors chose to exit due to fund closures. “We had investors that shut down their fund and tried to close all positions,” co-founder Shuyao Kong told The Block. “Since we don’t allow secondaries, the MegaETH team was the only available buyer.”
• Community Sales: MegaETH’s buyback follows a series of community-driven fundraising efforts, including: a $10M Echo round last December, the $13M The Fluffle NFT sale, and an upcoming public ICO through Sonar.