MegaETH Foundation to use USDM stablecoin revenue to fund MEGA token buybacks

The MegaETH Foundation will use revenue earned from the protocol's native stablecoin USDM to accumulate MEGA tokens through routine purchases, according to an announcement on Friday.

"USDm is the lifeblood of the MegaETH ecosystem. All marquee applications on MegaETH support USDM.  As these applications grow, USDm grows, further increasing buybacks of MEGA," the foundation wrote on X.

USDM was designed through a partnership between MegaLabs and Ethena. The asset will earn yield on its underlying reserves of USDtb, an Ethena-issued stablecoin backed by BlackRock’s BUIDL fund.

The move is part of a series of pre-mainnet announcements about the much-anticipated project expected to launch on Monday. Unlike many projects, MegaETH decoupled its token launch from its mainnet event.

Last week, for instance, MegaETH outlined four key performance indicators (KPIs) that will govern the release of over 50% of the total MEGA supply, ensuring that tokens only enter circulation based on measurable performance goals.

On Friday, MegaETH added detail to its tokenomics and launch plans by outlining three performance metrics that can independently trigger the MEGA token generation event.

This includes hitting milestones like reaching a 30-day time-weighted supply of at least $500 million USDM in circulation, having 10 MegaETH-based apps launch, or seeing at least three apps earn at least $50,000 in fees for 30 consecutive days, each with additional considerations.

"7 days after any of these 3 KPIs are achieved, MEGA will TGE," the foundation wrote. "All KPIs will be publicly trackable via custom front-ends on February 9th."

The foundation also noted that MegaETH’s novel economic experiment with "proximity markets" will go live in beta after the mainnet event.

Proximity markets use a bidding system for heavy protocol users like market makers, high-frequency traders, and apps to bid to secure "sequencer-adjacent" positions in MEGA, in theory reducing latency, improving execution, and lowering fees, while also creating demand for MEGA tokens.