Author: Zhou, ChainCatcher

According to DefiLlama latest data, the total value locked (TVL) of MegaETH experienced significant fluctuations from July 9 to 10, dropping to just over 30 million USD, a 60% decline in 24 hours, evaporating about 70% since the peak in May, on-chain leading protocol Aave V3 saw a daily withdrawal of 80% liquidity.

In terms of market performance, the price of MEGA dropped to around 0.048 USD, with a market capitalization of only about 54 million USD, FDV of approximately 4.8 billion.

MegaETH was one of the most anticipated new public chains in this round; as soon as it launched, it hit market hotspots, supported by a luxurious lineup of VCs and enthusiasm from KOLs for new projects, with the token FDV once hitting about 2 billion USD. In May this year, its DeFi TVL reached 245 million USD, briefly ranking 11th in public chain TVL.

From being a widely favored star public chain to experiencing a sharp decline in TVL within a short period, MegaETH took only a few months. As the financial support for its valuation weakens, has its price already hit the bottom? Or does it lack support for its valuation after the apparent prosperity fades away?

Highly dependent on a single protocol and circular strategy for TVL

In the ecosystem of MegaETH, at its peak Aave accounted for about 90% of the TVL on this chain. Currently, the total TVL stands at 6000 ten thousand USD fluctuating, among which Aave still accounts for about 65%.

In fact, over two months ago, the primary source of MegaETH's TVL had another source. On the day the token was listed, MegaETH ecosystem's native DEX protocol Kumbaya accounted for 59.03 million USD of the total chain TVL of 98.43 million USD, approximately 60%.

At the same time,Aave V3, GMX, and Chainlink Scale and other projects integrated and launched, afterwards TVL dominance gradually shifted to Aave.

Risk assessment agency LlamaRisk previously indicated that MegaETH's TVL is highly dependent on Aave while the stablecoin structure is heavily concentrated in USDm and USDe. In their view, excluding native assets, a high percentage of external assets entering MegaETH via third-party and specific asset channels indicates a concentration of funding sources, asset types, and protocols, which poses stability concerns.

Specifically, the market generally questions that this portion of size largely comes from Ethena-related stablecoin circular strategies, which involve repeatedly pledging stablecoins, borrowing, and re-pledging, using leverage to inflate book value.

This means that when the yield of USDe falls below Aave's borrowing costs, this arbitrage mechanism will lose its spread space, and the circular vault will begin to disassemble, leading to fund withdrawal.

Whether it is the point incentives during the launch period or the interest spread in circular strategies, this type of funding essentially comes for profit, and once the expected returns disappear, they will exit. This is common business behavior in DeFi and cannot be considered unexpected.

What truly alerts the market is what remains on MegaETH after this highly influential fund withdraws, and if what is left can support its current valuation.

Valuation and fundamentals, separated by three layers of mismatch

The first layer of mismatch occurs between valuation and actual usage

As of the publication date,MEGA has a market capitalization of about 54 million USD, with an FDV of around 470 million USD. According to RootData data, currently, 88.7% of the tokens are not circulating, with many holders unable to exit due to one-year lock-up arrangements, and in the future, there are still potential sell-off pressures.

Looking at the metrics, market sentiment has notably become cautious. One view suggests that this is a normal return to valuation following the withdrawal of incentive funds. With point incentives ceasing and the disappearance of the interest spreads in circular arbitrage, funds leaving is an inevitable outcome; MegaETH simply leveraged this approach heavily, causing an especially severe withdrawal.

At the community level, many users continue to question the team's communication and transparency, pointing out that Discord has closed community discussions, and Telegram is only open to users holding large amounts of tokens, with the team's public appearances being far less than before the launch.

However, these statements are mostly unilateral accounts from users and have not been officially confirmed. As of the publication date, the MegaETH team has not publicly responded to the relevant doubts.

For MEGA, whether it is seen as still returning to fundamentals or having already fallen into a clear mismatch between valuation and fundamentals, the future watchpoint remains the same: whether the team can transform short-term liquidity into actual use and convert the massive funds raised into tangible ecological outcomes.

Before these outcomes occur, aside from a short-term rebound brought by market sentiment, there seems to be no other solid reason for the valuation to stabilize again.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。