MegaETH’s public sale looks MegaCHEAP

This is a segment from the 0xResearch newsletter. To read full editions, subscribe.

---

GM, everyone. These markets are definitely not the easiest to trade. Bitcoin and major indices continue to bleed, and on the altcoin side, only 24% of the top 100 tokens have outperformed bitcoin in the last 90 days. However, there are still pockets of outperformance, and we believe MegaETH’s public sale will be one of them.

Indices

The market remained under pressure yesterday, with the S&P 500 (-0.62%), Nasdaq (-0.97%), and BTC (-0.63%) all closing lower. Despite the sharp selloff earlier this week, gold has continued to attract safe-haven flows, rising 0.78% as buyers stepped in amid a weaker dollar and growing expectations of rate cuts.

Much of the recent sentiment has been shaped by developments in US-China trade talks, but Q3 earnings are adding to the caution. Both Netflix and Tesla reported softer-than-expected results, while Texas Instruments issued a weak revenue outlook for the fourth quarter, citing tariff-related headwinds.

Crypto markets mirrored the broader pullback, with all sectors closing in the red. Still, a few pockets of resilience stood out. The AI sector, down -0.28%, and DeFi, down -0.27%, both outperformed BTC on the day. The AI index held up, mainly thanks to TAO, which accounts for 17.5% of the sector, supported by renewed optimism ahead of its halving event in two months.

At the other end, Launchpads and Memes were the weakest sectors, down -4.6% and -3.4%, respectively, reflecting fading risk appetite across the market. All eyes now turn to tomorrow’s CPI print, which could set the tone for inflation expectations and determine how quickly rate cuts follow.

Market Update

Despite $615 million in ETF inflows Tuesday, overall flows have flipped negative again, underscoring the market’s uncertainty. Much of bitcoin’s recent weakness has been driven by OG whales taking profits, with one notable trader, who pocketed $197 million during October’s crash, building a massive $230 million short position against BTC. But even he has now closed his short, a move that’s being read as a subtle signal of renewed confidence and a possible shift in sentiment.

The bulk of the recent moves have also come from the uncertainty of US-China trade relations and questions surrounding whether the presidents of both these countries will be meeting to discuss these issues. But there is a high chance of a resolution here, with markets on Kalshi pricing in a 70% chance of both the presidents meeting by the end of October. Any small positive development here is enough to push the market higher. 

The Altcoin Season Index paints a similar picture of consolidation. We’re sitting near 90-day lows, with only 24 of the top 100 tokens outperforming bitcoin, including exchange tokens such as BNB and MNT, perp DEX names like ASTER and MYX, and privacy coins including ZEC and XMR. These pockets of strength reflect the recent narratives that have run. Periods like this, when exuberance fades and dominance consolidates, often form the base for the next market leg higher.

With three rate cuts expected in 2025 and a potential Trump-Xi Jinping meeting on the horizon, there are clear short-term tailwinds building for a relief move. But remember, markets rarely reward complacency. Stay patient, stay nimble, and accumulate projects you’d want to own even if the market takes one more leg down.

MegaETH’s public round

MegaETH’s public sale could offer outsized returns for early buyers. 

This is the third round open to the community, after the Echo community round (priced similarly to VC investors including Dragonfly and Vitalik) and the Fluffle NFT round, which implied roughly a $532 million FDV. This follows MegaETH’s recent buyback of around 4.75% equity and token-linked warrants from early pre-seed investors. 

The public sale of $MEGA starts at 9 a.m. ET on Oct. 27, 2025 and will run for 72 hours. Key details of the upcoming sale include:

• Date: Oct. 27-30, 2025 (72 hours)
• Payment Method: USDT on Ethereum mainnet
• Supply: 10 billion MEGA tokens (5% allocation, totaling 500 million tokens)
• Sale Format: English Auction (FDV range approximately $1 million-$999 million)
• Bid Limits: Minimum $2,650 / Maximum $186,282
• Lock-up Terms: Mandatory one-year lock-up plus 10% discount for US investors; optional lock-up for non-US investors

While the public sale initially opens at an implied FDV as low as $1 million, recent raises strongly suggest it will reach the maximum valuation of around $1 billion (and quickly). Meanwhile:

• The MEGA-USD premarket perpetual on Hyperliquid currently prices $MEGA at a $5 billion FDV, with $17 million in trading volume over the past 24 hours.
• Polymarket, despite lower volume ($147K traded), forecasts an 89% likelihood that MEGA trades above a $2 billion FDV and a 50% chance it surpasses $4 billion FDV within 24 hours post-launch.

But why would MegaETH intentionally launch below its potential valuation ceiling?

Historically, public sales conducted via English auctions suffer from a common problem: The sale price lands exactly at the valuation acceptable to the final marginal buyer. When the token becomes liquid post-sale, buying pressure evaporates, often triggering a price collapse. Dutch auctions (where price starts high and lowers) have a similar problem; the marginal buyer buys at the highest price acceptable to them. Oftentimes the subsequent price action leads to the project being dead out of the gates.

Therefore, recently some projects have deliberately chosen to underprice their public sales (think Plasma at $500 million FDV), guided by the following ideals:

1. The best way to build a community is to reward them early and give them something to believe in.
2. Long term, the market is a weighing scale and prices will adjust close to fair value. 
3. If the fair value of a token is $5 billion, it’s better that the token re-rates upwards from $1 billion, rather than repricing from $20 billion to $5 billion.

Raising a small community round at an attractive valuation appears to be an effective go-to-market strategy, almost becoming a necessary “community tax” similar to airdrops for building positive public sentiment. Overall, I believe the MegaETH public sale will be worth a punt.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• The Drop: Apps, games, memes and more.
• Lightspeed: All things Solana.
• Supply Shock: Bitcoin, bitcoin, bitcoin.