MegaETH will use USDM revenue to buy back MEGA tokens

MegaETH Foundation will use the revenue generated from the protocol’s native stablecoin, USDM, to accumulate MEGA tokens through periodic buybacks, according to an announcement released on Friday.

“USDM is the lifeblood of the MegaETH ecosystem. All flagship applications on MegaETH support USDM. As these applications grow, USDM also increases, thereby driving MEGA buybacks,” MegaETH wrote on X.

USDM was developed through a collaboration between MegaLabs and Ethena. This asset yields returns from its underlying reserve, USDtb, a stablecoin issued by Ethena and backed by BlackRock’s BUIDL fund.

This move is part of a series of announcements ahead of the highly anticipated mainnet launch, scheduled for next Monday. Unlike many other projects, MegaETH has separated token issuance from the mainnet event.

Last week, MegaETH announced four key performance indicators (KPIs) that govern the distribution of over 50% of the total MEGA supply, ensuring tokens are only released into circulation once measurable performance targets are met.

By Friday, the project continued to clarify its tokenomics and launch plan by introducing three performance criteria, each capable of independently triggering a MEGA token generation event (TGE).

These criteria include: achieving an average USDM supply of at least $500 million over 30 days; deploying 10 applications built on MegaETH; or at least three applications generating a minimum of $50,000 in fees over 30 consecutive days, along with additional conditions.

“After 7 days from when any of these three KPIs are met, MEGA will proceed with the TGE,” the fund stated. “All KPIs will be publicly monitored through custom interfaces starting February 9.”

Additionally, the fund confirmed that MegaETH’s new economic experiment called “proximity markets” will be launched in beta mode after the mainnet event.

Proximity markets utilize a bidding mechanism for core user groups such as market makers, high-frequency traders, and applications, allowing them to compete for “adjacent sequencer” positions. This model, in theory, helps reduce latency, improve order matching quality, lower transaction fees, and create additional demand for the MEGA token.