MegaETH co-founder Shuyao: "Ten thousand years is too long for Ethereum, we only strive for the present" | Interview with RootData listed project

Interview: Mensh, ChainCatcher

Guest: Shuyao, Co-founder of MegaETH

Author: Mensh, ChainCatcher

*Editor’s Note: During the Devcon in Bangkok, the Web3 asset data platform RootData, in collaboration with ChainCatcher, officially launched the * “RootData: 2024 Web3 Industry Development Research Report and Annual List”* (click the link to view the full report and list).*

The report provides a detailed analysis and interpretation of the development characteristics of the 2024 Web3 venture capital market and prominently releases the RootData List 2024. This list is the second annual selection launched by RootData following its first release in 2023, and its results are gaining attention from more entrepreneurs, investors, LPs, and general crypto enthusiasts.

The RootData List 2024 includes five categories: Top 50 Projects (Completed TGE), Top 50 Projects (Pre-TGE), Crypto VC Top 50 Investment Institutions, Top 10 Angel Investors, and Top 20 Best CEOs.

ChainCatcher will publish a series of articles to engage with the projects and institutions listed in the RootData List 2024, seeking builders who navigate through bull and bear markets and tracking the latest trends in Web3.

Today's featured project, MegaETH, is included in the RootData List 2024 under the category "Top 50 Projects (Pre-TGE)."

On December 13, Mega Labs, the developer of the real-time blockchain MegaETH, raised $10 million on the renowned angel investment platform Echo, with shares sold out in just 50 seconds.

As the first "real-time" blockchain on Ethereum, MegaETH received investments this June from industry giants such as Vitalik Buterin, Joseph Lubin, Sreeram Kannan, and well-known VCs like Dragonfly, Figment Capital, Robot Ventures, and Big Brain Holdings. However, MegaETH chose to forgo the opportunity to raise funds from VCs at a higher valuation. Shuyao, co-founder of MegaETH, revealed to ChainCatcher that the new round of financing maintains the same valuation of over $100 million as in June, aiming to open the investment window equally to every community participant.

Breaking the mold is a consistent style of MegaETH. While the Ethereum community discusses longevity and AI at Zuzalu, planning for ten thousand years ahead, Shuyao noticed that no one was addressing the most urgent issue: the lack of a chain that is fast enough and cheap enough. MegaETH chose to be an anti-hero, pulling Ethereum out of a ten-thousand-year dream, focusing on the present.

The Most Pragmatic Idealist

Shuyao recognized the crisis of Ethereum early on. On one hand, she saw impressive user and transaction data on Solana; on the other hand, as the global business development head at ConsenSys, she was constantly receiving complaints from developers while looking for developers for Linea. She found that existing Ethereum Layer 2 solutions, while technically appealing, did not improve the user experience. Ethereum lacked a chain that was particularly fast and particularly cheap.

At this juncture, Shuyao met her future partners, Li Yilong and Yang Lei. Li Yilong is a PhD in Computer Science from Stanford University, specializing in low-latency data center computing, which accelerates execution environments. Yang Lei is a PhD in Computer Science from MIT, researching decentralized systems that can seamlessly connect a particularly fast execution layer with Ethereum's consensus layer. The three hit it off and decided to create a blockchain that could deliver outstanding performance, leading to the birth of MegaETH. While the Ethereum community was still dreaming about humanity's longevity in 2050, MegaETH chose to be the pragmatic alternative. To speed up using centralized sorters, MegaETH rewrote its data structure.

Shuyao believes that the so-called Layer 2's function is to scale, without wanting to bear the responsibilities of security and consensus. If many sorters are created, it is equivalent to doing Layer 1's work. In 2021, Vitalik proposed an ideal roadmap for Rollups in a blog titled “Endgame”: centralized block production + decentralized block validation, ensuring effective scaling while maintaining censorship resistance. Today, compared to many Optimistic Rollups and Zero-knowledge Rollups that focus on fraud proofs, MegaETH, which uses centralized sorter hardware for scaling, seems to be the Layer 2 closest to this architecture. In terms of performance, MegaETH is indeed the closest to real-time processing.

According to Shuyao, the time required for a transaction to be executed is 400 milliseconds for Solana, 265 milliseconds for Arbitrum, and MegaETH can achieve 10 milliseconds, soon to be 1 millisecond. The low-latency performance brings a significant difference in user experience; for example, in DeFi, it allows for arbitrage and the use of different strategies. From a gaming perspective, users can play various real-time games without delay.

Currently, MegaETH's testnet is in preparation and is expected to launch in early 2025. There are nearly 20 projects incubating in the on-chain ecosystem, all of which have high performance requirements, such as the decentralized VPN Hop Network, decentralized trading platform GTE, and game streaming platform Pump Party. Shuyao stated that the developers recruited by MegaETH are carefully selected. They must have the ambition for mass adoption and focus on creating new application scenarios, and the uniqueness of the applications can better highlight MegaETH's high-performance technical advantages.

Shuyao said, "I'm not selling them (the project parties) a chain; I'm selling them a dream. This dream is that they will become very successful entrepreneurs and create a protocol that will definitely reach $1 billion." She proudly mentioned that compared to MegaETH, projects within its ecosystem have raised nearly $23 million, making it the first chain where on-chain projects have raised more money than the chain itself.

Always Community First, True Cyberpunk

On December 13, Mega Labs secured $10 million in funding on Echo, the largest financing since Echo launched its beta in April. According to The Block, this round of financing attracted about 3,200 investors from 94 countries, with an average check size of $3,140 per investor. During the open subscription period, the Base chain used by the Echo platform and exchange nearly collapsed.

When asked why they chose to raise funds from Echo instead of seeking VCs, Shuyao explained that MegaETH is always "community first." "The previous model of raising high rounds from VCs and then selling to retail investors is over. That old model made retail investors work hard in Discord every day, which I find very unfair. The fairest way for the community is to come directly as my investors, regardless of whether you are a whale or a small fry; the price is low, and I give everyone the same allocation, a few thousand dollars, and you just come and buy. I think this is the most cyberpunk aspect. A big term sheet from a VC has no extra value for me; what is more valuable is definitely my users." She mentioned that in the future, they might also involve the community early on in a particularly crypto-native way.

In The Block's report, Shuyao emphasized that Hyperliquid recently successfully launched its token without the involvement of venture capital, proving that the demand for community-driven projects is growing. The future of blockchain lies in decentralization and fair ownership. MegaETH is committed to ensuring genuine community participation, following in Ethereum's footsteps and prioritizing community ownership.

World Computer, Anti-hero's Dream

On Shuyao's Decrypt personal column, there is a very interesting self-introduction------

She is from Beijing and went to Smith College in the United States. Because she resisted the standardized persona of the American dream, she chose to work in Nigeria for two years after graduation. There, she witnessed the country's poverty and corruption, observed the government's inaction in monetary and financial policies, and realized that poverty is man-made. It was also there that she first encountered someone using Bitcoin for transfers between Africa and Europe.

In 2015, she moved from Africa to the Middle East, working in financial consulting at IBM, and later caught the wave of the 2017 ICO boom. Her experiences in Africa and belief in disrupting traditional finance led her to enter the crypto space and become one of the founding employees at ConsenSys, where she has been in business development for over six years. She mentioned, "In 2017, there was a meme that particularly resonated with me: the world computer. I thought, if Ethereum is the world computer, doesn't that mean everyone is a Steve Jobs? This idea is very great. Because personal computers can only make you stronger, but the world computer solves the problem of coordination between people."

Now she is no longer that industry newcomer who is enamored with the narrative of "disrupting traditional finance." Instead, she questions in her blog why it is hard to imagine a cryptocurrency that truly makes the world a better place. The world is already functioning well; what can crypto bring?

Shuyao's answer is: "Many things actually cannot go on-chain. Many games or social products built by builders remain in databases because the chain is not strong enough. Why is MegaETH a revolutionary product? When your chain is strong enough, and when everything can go on-chain, you discover that it can uncover a new market. This is the greatness of the world computer; originally, your data is stored in different databases, and they are not interconnected. But if we connect them, for example, when you order food on Meituan and check something on Xiaohongshu, etc., you can uncover new efficiencies and new insights. Originally, everyone asked what should go on-chain; we hope to change the question to why you can't go on-chain if you can. So I think this can open up a new realm for everyone regarding application scenarios."

From Chain to Operating System, Bringing Good Products to Users

When discussing the future roadmap, Shuyao stated, "We never consider ourselves a chain company; we are actually building an operating system, with some API infrastructure projects on the chain to help developers develop better and acquire traffic at the front end. The chain is our first step. After that, we will expand around the chain in terms of ecosystem or product development." It is reported that the MegaETH team is very crypto-native, with each member being a seasoned user of Web3 products.

Conclusion

Shuyao believes that the world computer allows "small people to do big things, like you and me. I am an entrepreneur, and you are a storyteller; the world computer gives us an audience, and everyone can discover new continents." What MegaETH is doing now is also taking a step further in this direction.

Notes:

Zuzalu, an experimental "liquid city community" conceived by Ethereum co-founder Vitalik Buterin. From March 25 to May 23, 2023, the community gathered to delve into topics such as longevity, public goods, zero-knowledge proofs, artificial intelligence, and network states.

Echo, an angel investment platform founded by renowned cryptocurrency trader Jorden Fish (known as "Cobie").