Interview: Mensh, ChainCatcher

Guest: Shuyao, co-founder of MegaETH

Author: Mensh, ChainCatcher

 

Editor's Note: During Devcon in Bangkok, Web3 asset data platform RootData and ChainCatcher jointly held the "DeInsight 2024" annual summit and officially released (RootData: 2024 Web3 Industry Development Research Report and Annual List) (click the link to view the full report and list).

The report analyzes and interprets in detail the development characteristics of the Web3 venture capital market in 2024, and releases the RootData List 2024. This list is the second annual selection launched by RootData after its first release in 2023. The results of the list are being paid attention to by more entrepreneurs, investors, LPs and pan-Crypto enthusiasts.

RootData List 2024 covers five rankings, specifically: Top 50 Projects (TGE completed), Top 50 Projects (TGE not conducted), Crypto VC Top 50 Investment Institutions, Top 10 Angel Investors, Top 20 Best CEOs.

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

Today's listed project MegaETH has been selected for the RootData List 2024 annual ranking "Top 50 Projects (Pre-TGE)."

On December 13th, real-time blockchain MegaETH's developer Mega Labs raised $10 million on the renowned angel investment platform Echo, with shares being snapped up in 50 seconds.

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

Not playing by the rules is MegaETH's consistent style. While the Ethereum community talks about longevity and AI at Zuzalu, planning for ten thousand years from now, Shuyao finds that no one is addressing the most urgent issue at hand, which is the lack of a chain that is fast enough and cheap enough. MegaETH chooses to be an anti-hero, pulling Ethereum out of the dream of ten thousand years and only striving for the present.

The most pragmatic ideal cultivator.

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

At this point, Shuyao met her later 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 the execution environment. Yang Lei is a PhD in computer science from MIT, researching decentralized systems that can seamlessly link a particularly fast execution layer with the Ethereum consensus layer. The three hit it off and decided to create a blockchain that could achieve explosive performance, thus MegaETH was born. While the Ethereum community is still dreaming of humanity's longevity in 2050, MegaETH chooses to be the pragmatic alternative. To speed up using centralized sorters, MegaETH rewrote its data structure.

Shuyao believes that Layer 2 is essentially about scaling and does not want to bear the responsibilities of security and consensus. If many sorters are created, it is equivalent to doing Layer 1 work. In 2021, Vitalik proposed the ideal roadmap for Rollup in a blog titled (Endgame): centralized block production + decentralized block validation, achieving effective scaling while ensuring censorship resistance. Today, compared to many Optimistic Rollups and Zero-knowledge Rollups that play around with fraud proofs, MegaETH, which uses centralized sorting hardware for scaling, seems to be the Layer 2 that is closest to this architecture. In terms of performance, MegaETH is indeed the closest to a real-time processing chain.

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, which will soon be reduced to 1 millisecond. This low latency performance makes a significant difference for user experience; for instance, in DeFi, it allows for arbitrage and various strategies; from a gaming perspective, users can play various real-time games with no delay.

Currently, MegaETH's test network is being prepared, with an expected launch in early 2025. Nearly 20 projects have already been incubated in the on-chain ecosystem, all of which have high performance requirements for the chain, such as 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. First, they must have the ambition for mass adoption and focus on new application scenarios; secondly, the uniqueness of the applications can better highlight MegaETH's high-performance technical advantages.

Shuyao said: "I am not selling them (the project parties) a chain; I am 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, its ecosystem projects raised nearly $23 million, making it the first on-chain project to raise more money than the chain itself.

Always community first, truly cyberpunk.

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

Regarding the choice 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 toil away on Discord every day, which I think is very unfair. The fairest way for the community is to come directly as my investors, 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 certainly my users." She mentioned that in the future, they might use particularly crypto-native methods to involve the community early on.

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

World computer, the dream of an anti-hero.

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

She is from Beijing and attended Smith College in the United States. Due to her aversion to the standardization of the American dream, she chose to work in Nigeria in West Africa for two years after graduation. There, she witnessed the country’s poverty and corruption, observed the government's inaction regarding monetary and financial policies, and discovered that poverty is actually man-made. It was also there that she first encountered someone using Bitcoin for transactions between Africa and Europe.

In 2015, she came to the Middle East from Africa, working in financial consulting at IBM, and later got involved in the ICO boom of 2017. Her experiences in Africa and her belief in disrupting traditional finance led her to enter the crypto space and become a founding employee 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, which was the world computer. I thought, if Ethereum is the world computer, then doesn’t that mean everyone is a Jobs? That idea is truly great because personal computers only make you stronger, but the world computer solves the coordination problem between people."

Now she is no longer the industry newcomer who is captivated by the narrative of "disrupting traditional finance." On the contrary, she questions in her blog why it is hard to imagine a cryptocurrency truly making the world a better place. The world is already functioning quite well; what can crypto bring?

Shuyao's answer is: "It turns out that many things cannot actually be put on the chain. Many builders' games or social products are still stored 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 be on-chain, you discover that it can uncover a new market. This is the greatness of the world computer; originally your data is placed in different databases, and they are not interconnected. But if we connect them, for example, when you order food on Meituan and what you looked up on Xiaohongshu are interconnected, you can discover new efficiencies and new insights. Originally, everyone asked what should go on the chain; we hope to turn the question into why you can't put it on the chain. So I think this can open up a new realm of application scenarios for everyone."

From chain to operating system, bringing good products to users.

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

Conclusion

Shuyao believes that the world computer enables "small people to do big things, like you and me. I am an entrepreneur, and you are a storyteller. The world computer allows us to gain an audience, and everyone can discover new continents." What MegaETH is doing now is taking a further step 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 immortality, public goods, zero-knowledge proofs, artificial intelligence, and network nations.

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