Author: Michelle Lazo

MegaLabs, the leading developer behind the innovative Ethereum scaling protocol known as “MegaETH,” announced a successful $20 million seed funding round led by Dragonfly Capital. This new investment aims to advance MegaETH, a blockchain designed for real-time transaction processing, capable of streaming 100,000 transactions per second with millisecond-level responsiveness.

MegaLabs Secures Funding to Revolutionize Blockchain Speed

The funding round saw participation from Figment Capital, Folius Ventures, Robot Ventures, Big Brain Holding, Tangent, and Credibly Neutral. Notable angel investors included Vitalik Buterin, co-founder of Ethereum, Joseph Lubin, CEO of Consensys, Sreeram Kannan, creator of EigenLayer, and Hasu of Flashbots.

Yilong Li, co-founder of MegaLabs, explained the company’s vision: “We define a real-time blockchain as one that processes transactions immediately upon arrival and produces outputs at a very high frequency.”

Real-Time Blockchain Innovation

MegaETH’s ability to scale is attributed to two primary factors: its “heterogeneous blockchain architecture,” which enhances performance by allowing network nodes with various hardware configurations to specialize in specific tasks, and a “hyper-optimized EVM execution environment” that maximizes throughput, latency, and resource efficiency. This execution environment operates as a blockchain operating system compatible with Ethereum’s programming standards.

The concept of MegaETH was partly inspired by Vitalik Buterin’s 2021 blog post “Endgame,” where he discussed scaling Ethereum. Buterin expressed his enthusiasm for MegaETH’s potential: “Creating hyper-scalable EVM implementations is a key prerequisite for truly scaling Ethereum. I am excited to see brilliant developers taking on this challenge.”

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The insatiable demand for power by artificial intelligence firms is benefiting Bitcoin miners. Hut 8 (NASDAQ:HUT) shares outperformed most peers on Monday after the Miami-based company received a $150 million investment from Coatue Management to develop AI infrastructure.

This investment will be provided through convertible notes with an 8% annual interest rate and a conversion rate of $16.395 per share, as stated by the company. Following the announcement, Hut 8 shares rose nearly 4% during Monday morning trading, even as most of its peers followed Bitcoin (BTC) lower.

The investment also positively impacted other Bitcoin mining-related data centers involved in AI and high-performance computing. Soluna Holdings (NASDAQ:SLNH) surged almost 17%, and Applied Digital (NASDAQ:APLD) gained about 10%.

AI and HPC firms are increasingly turning to the Bitcoin mining industry to fulfill their computing power needs. These miners often already possess the required computing capacity and established deals with power suppliers. JPMorgan highlighted that the demand for power by large-scale data centers and AI firms might spark a new era of mergers and acquisitions for Bitcoin miners with favorable power contracts.

Recently, cloud computing provider CoreWeave signed a 200-megawatt deal with miner Core Scientific (NASDAQ:CORZ) for AI-related services and offered to purchase the entire company for over $1 billion. Core Scientific rejected the offer, citing that it undervalued the company.

Coatue Management, an investor in CoreWeave, underscores the high level of interest in utilizing Bitcoin miners’ existing infrastructure for AI services.

Hut 8 emphasized this need for power in their press release, stating, “Many traditional data center operators are failing to meet the surging demand for AI compute capacity due to power shortages, long lead times to bring new capacity online, and the extensive upgrades required for existing data centers to support the latest generation of high-density compute.” Hut 8 aims to help bridge this gap.

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The U.S. Securities and Exchange Commission has concluded its investigation into Ethereum 2.0, according to a late Tuesday announcement by cryptocurrency firm ConsenSys on social media platform X. ConsenSys had previously filed a lawsuit seeking an injunction against the SEC’s regulation of the Ethereum blockchain.

ConsenSys founder Joseph Lubin hailed the SEC’s decision as “a significant victory” for Ethereum. “While we welcome this development, it’s not enough. We must remain vigilant and continue advocating for clear and fair regulations that enable innovation to flourish,” Lubin, who also co-founded the cryptocurrency Ether, stated on X.

Despite the SEC’s decision, ConsenSys plans to continue its lawsuit to seek a court ruling that the SEC lacks legal authority to regulate the user-controlled software interfaces built on Ethereum or the Ethereum blockchain itself.

An SEC spokesperson declined to comment on the existence or nonexistence of a possible investigation.

Last month, the SEC approved applications from Nasdaq, CBOE, and NYSE to list spot Ether ETFs, a surprising win for the cryptocurrency industry, which had anticipated rejections.

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Marathon Digital Holdings (NASDAQ:MARA) has integrated its multi-chain layer-2 network, Anduro, with the decentralized exchange network Portal to Bitcoin. This integration aims to enhance the utility of the Bitcoin network by enabling atomic swaps, which allow for peer-to-peer transactions of cryptocurrencies across different blockchains.

Marathon, a publicly-traded bitcoin miner, began incubating Anduro in February, describing it as “a platform built on the Bitcoin network that allows for the creation of multiple sidechains.” The integration with the San Francisco-based fintech provider and subsequent renaming to Portal to Bitcoin was announced in an email shared with CoinDesk on Wednesday.

Previously known as Portal, the company raised $34 million in a seed round in March. It leverages the Bitcoin layer-2 network Lightning to facilitate atomic swaps, enabling users to convert assets like Ethereum (ETH) into Bitcoin (BTC).

This development brings greater utility to Bitcoin, a feature common among Ethereum-based assets and other blockchains but relatively new to Bitcoin. Anduro’s integration with Portal to Bitcoin may also offer new revenue streams for miners. By using merge-mining, participating miners can earn Bitcoin-denominated revenue from transactions on these sidechains while continuing to mine Bitcoin on the base layer.

“Integrating Portal to Bitcoin enhances the utility of Bitcoin and presents new opportunities for revenue generation for miners,” said a Marathon spokesperson.

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Hashdex has submitted a proposal to the Securities and Exchange Commission to create an exchange-traded fund that would include both Bitcoin (BTC) and Ethereum (ETH). The proposed ETF, named Hashdex Nasdaq Crypto Index US ETF, aims to offer investors exposure to the two leading cryptocurrencies, reflecting their distribution in the Nasdaq Crypto Index.

The ETF would be composed of approximately 70.54% Bitcoin and 29.46% Ethereum, adhering to a market-cap-weighted strategy that mirrors the broader cryptocurrency market as represented by the Nasdaq Crypto Index.

This initiative marks a significant advancement in integrating digital assets into conventional financial instruments, potentially broadening the accessibility of cryptocurrencies to a wider range of investors. The fund will be backed by custodians Coinbase (NASDAQ:COIN) Custody Trust Company and BitGo Trust Company and will maintain cash reserves.

While initially focusing on Bitcoin and Ethereum, the ETF may consider including additional digital assets in the future, pending SEC approval. This proposal arrives during a favorable regulatory climate, following the SEC’s approval of Bitcoin spot ETFs and the anticipated introduction of Ethereum ETFs in the U.S. market.

SEC Chair Gary Gensler recently indicated to a Senate committee that Ethereum ETFs might begin trading by this summer.

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