GTE flies solo, MegaETH remains silent, is the "breakup" behind it a case of abandoning the donkey after the grind or a capital will?

Author: Frank, PANews

The cryptocurrency community that loves to “eat melons” has recently been buzzing about a “breakup” announcement. The decentralized exchange GTE (Global Token Exchange) has officially announced its separation from its underlying L2 network MegaETH and may start building its own mainnet. This sudden change has sparked widespread discussion and speculation within the community.

Some believe this is a “team feud” caused by ideological differences or conflicts of interest, while others keenly point out that it may be a well-considered strategic bet by top venture capital firm Paradigm in the L2 space.

Behind this “breakup”, is it truly the rupture of a partnership or a strategic shift driven by capital? When the once seemingly perfect match of the “killer application” and the “high-performance public chain” go their separate ways, what will be the future paths for each of them?

The Beginning of Symbiosis - The “High-Performance” Narrative of a Perfect Match

To understand the plot of this breakup, we may need to first explore why GTE and MegaETH were initially so deeply bound together, as well as the “high-performance” narrative they built together.

At its inception, GTE had a vision similar to Hyperliquid: to provide trading speed and experience comparable to top centralized exchanges like Binance and Coinbase while retaining the core characteristics of decentralized non-custodial trading. To achieve this goal, GTE adopted a centralized limit order book (CLOB) model commonly seen in traditional financial markets, addressing the common pain points of high latency, high slippage, and high trading costs prevalent in traditional DEXs.

Supporting this ambition is a team of well-known pedigree. According to official sources, its core members come from global top financial and technology giants such as Citadel, Nasdaq, Google, Jump, and Palantir.

For the GTE team, achieving the above experience must be built on a public chain with extremely high performance, and most existing public chains seem to struggle to support such a goal.

MegaETH is an Ethereum Layer 2 specifically designed for extreme performance. It utilizes Optimistic Rollup technology, aiming to push the performance of the EVM to hardware limits. MegaETH publicly claims that its network can achieve a throughput of up to 100,000 TPS and sub-millisecond latency, figures that far exceed all mainstream blockchains at the time. To achieve this goal, MegaETH employs an innovative architecture that includes a centralized sequencer and parallel processing, tailored for high-frequency trading and fully on-chain gaming, among other applications that require high real-time performance.

In June 2024, its development company MegaLabs completed a $20 million seed round financing led by Dragonfly, with participation from industry giants such as Ethereum founder Vitalik Buterin and Consensys founder Joseph Lubin.

In the initial promotion, the relationship between GTE and MegaETH was deeply intertwined, with GTE being described as a project incubated by the MegaETH lab, specifically and solely built on MegaETH. GTE’s co-founder Enzo Coglitore has publicly stated that given GTE’s extreme requirements for infrastructure, “MegaETH is the only blockchain capable of providing the required performance.”

This “bundling strategy of ‘revolutionary applications require revolutionary public chains’” has been very successful. By the end of 2024 and the beginning of 2025, MegaETH and GTE respectively secured $10 million in financing. On March 21, 2025, the MegaETH public testnet officially launched, demonstrating a performance of 20,000 TPS. GTE, as the first major application on it, attracted a large number of users and attention, validating the feasibility of MegaETH’s high-performance narrative.

Behind the divergence, it may be Paradigm’s re-betting.

In May 2025, the official X account of MegaETH was once attacked by hackers, leading many users to accidentally click on fraudulent links. During this process, the testing of GTE was in full swing, with the official stating that the goal of exceeding 1 million users on the testnet was achieved in the past three to four months.

In addition, the outstanding performance has made GTE favored in the capital market. In June 2025, Paradigm exclusively led GTE’s $15 million Series A financing. This influx of funds brought GTE’s total financing amount to over $25 million, completely changing GTE’s strategic position. It transformed from an incubated project dependent on MegaETH to a well-funded independent entity with full strategic autonomy. Just two months later, GTE officially announced its separation from MegaETH, establishing its own identity.

However, this breakup seems somewhat awkward. GTE stated on its official media account: “GTE has grown and is now leaving Mega Mafia.” Many believe this is a statement of abandoning a used tool. Some comments on Twitter referred to it as a “non-existent application, leaving a non-existent chain,” implying that most of the so-called users are bots.

Of course, the main reason may come from GTE’s recent financing investor—Paradigm. As a star investor in the cryptocurrency field, Paradigm has created multiple remarkable achievements in the past, such as Uniswap, dYdX, Coinbase, etc. However, in the past year or two, Paradigm’s investment vision seems to have encountered problems, especially during the rise and fall of Blur and Blast.

As a key project that Paradigm has focused on for nearly two years, Blast quickly rose to prominence with its innovative native yield model, with its TVL surpassing $2.7 billion in just six months. However, its popularity did not last. Due to user dissatisfaction stemming from the token airdrop mechanism and frequent security incidents within the ecosystem, Blast’s ecosystem rapidly declined. By July 2025, its TVL plummeted by 96% from the peak of $2.7 billion to approximately $10.5 million, and daily active users also saw a sharp drop from 180,000 to less than 4,000. Its token price also crashed, with a decline of nearly 90%.

As a major investor in Blast, Paradigm has undoubtedly learned a profound lesson: binding a promising application too closely to a single L2 that has not been fully validated by the market carries significant systemic risks. The success or failure of L2 infrastructure may become a “single point of failure” for the entire portfolio.

Therefore, the most rational investment decision is not just to invest in GTE, but to invest enough funds to enable it to gain the ability to break free from reliance on a single infrastructure. This shifts Paradigm’s bet from an uncertain question of “Can L2 succeed?” to a more certain question of “Can elite application teams succeed?” Furthermore, if an independent portal develops its own chain, it raises the project valuation from a single DAPP to the level of a public chain, which has a positive impact on the project’s valuation after TGE.

However, Paradigm has more considerations in this investment. In addition to GTE, Paradigm also led a $225 million financing round for the high-performance L1 blockchain Monad (a direct competitor of MegaETH). Now, as GTE separates from MegaETH, there is a possibility of turning towards Monad in the future. The deep binding between these two projects with higher market enthusiasm may achieve similar effects as Hyperliquid. Through this layout, whether L1, L2, or self-built application chains ultimately prevail, Paradigm will remain in a position of invincibility.

After a sudden separation, can each of them find peace?

Therefore, the separation of GTE and MegaETH is not just a simple “team conflict”; it is likely a rational business decision driven by capital. As for the development of MegaETH, given the current situation, it indeed leaves much to be desired. Its relevant data cannot be found on mainstream data platforms or specialized Ethereum L2 ecosystem data platforms. Coupled with the silence over the past three months and GTE’s departure, this further complicates future development. However, within the MegaETH ecosystem, there are still several projects such as Biomes, Noise, and Euphoria. Whether the “MegaMafia” developer accelerator program will support the emergence of the next star project will be a key focus.

For GTE, breaking up might not be the perfect choice. Within the community, there are many doubts about its true activity level, with some users sarcastically stating that most of GTE’s 1 million test users are composed of robots. Additionally, for GTE, whether it builds its own public chain or relies on another public chain, it will delay the official launch time of its products. By that time, on one hand, it will face uncertainties in the new ecosystem, and on the other hand, it will have to deal with whether its own products can retain enough users.

The separation of GTE and MegaETH is a microcosm of the complex relationship evolution among capital, applications, and infrastructure in the Web3 world. It signifies that venture capital strategies are shifting from merely supporting underlying protocols to empowering top-tier applications. The practice of this “fat application” theory driven by capital will have a profound impact on the entire public chain landscape.

Perhaps this great separation has no absolute winners or losers; it is just another footnote in the continuous evolution and survival of the fittest in the crypto world.