Ethena Labs And MegaETH Introduce USDm To Power Real-Time Applications With Low-Cost, Yield-Backed Network Model
In Brief
MegaETH and Ethena launch USDm, a native stablecoin designed to power real-time applications with low-cost, network-aligned incentives.
Developers of the decentralized protocol and synthetic dollar known as USDe, Ethena Labs, announced the introduction of USDm in collaboration with MegaETH, an Ethereum Layer 2 scaling solution.
The new stablecoin is specifically created to support real-time applications on MegaETH, with the aim of aligning incentives within the network, operating the sequencer at cost, and maintaining minimal fees for both users and developers.
USDm is issued through Ethena’s stablecoin infrastructure and is intended to be closely integrated into wallets, applications, and on-chain services throughout the MegaETH ecosystem.
Unlike many other Layer 2 networks that generate revenue by applying additional margins on sequencer fees, this approach often creates a conflict between the chain and its ecosystem, as higher margins mean increased costs for users while applications rely on low fees to scale effectively.
With greater throughput and declining data costs, sustaining such margins becomes increasingly unstable and difficult to justify, while raising fees to preserve them risks discouraging the very activity necessary for growth.
Through USDm, MegaETH shifts the source of network funding from user fees to financial yield. The first version of USDm is issued on Ethena’s USDtb framework, with reserves primarily allocated to BlackRock’s tokenized US Treasury fund (BUIDL) via Securitize, complemented by liquid stablecoins to support redemptions.
This structure provides transparent, institution-grade collateralization along with a consistent yield foundation. Ethena’s stablecoin system is designed with flexibility, allowing MegaETH to adapt the collateral composition of USDm over time by incorporating other existing or future Ethena products, including USDe.
While USDtb serves as the basis for version one, the framework ensures that reserves can evolve in line with market dynamics. The yield generated by reserves is automatically directed toward covering sequencer operations, enabling gas pricing at cost and ensuring that fees remain stable and minimal without requiring a margin.
This alignment removes the need to increase user fees as network activity grows, since the expansion of ecosystem usage is sustained by stablecoin yield rather than direct charges on participants. With fees kept predictable and below a cent, new categories of applications become practical that would not be feasible in environments where each transaction costs multiple cents.
Core Stablecoins Strengthen Utility And Liquidity Across The MegaETH Ecosystem
MegaETH is introduced as a real-time blockchain that operates with the security of Ethereum and is supported by a highly optimized execution environment based on a heterogeneous architecture. It is designed to deliver streaming throughput with latency as low as 10 milliseconds and handle up to 100,000 transactions per second. This structure enables developers to scale applications through real-time state streaming, while users benefit from near-instant transaction finality without sacrificing Ethereum’s composability.
Stablecoins already integrated into the MegaETH ecosystem, such as USDT0 and cUSD, continue to function as core assets across wallets, paymasters, decentralized exchanges, and money markets. USDT0 acts as the canonical representation of USDT within MegaETH, with liquidity, oracle coverage, and optimized routing maintained to provide both developers and users with flexibility in asset selection.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
