GTE goes solo, MegaETH goes silent. Is the breakup a case of abandoning the team or the will of capital?

The decentralized exchange GTE (Global Token Exchange) has announced its separation from its underlying Layer 2 network MegaETH, sparking speculation about whether this is a strategic move driven by capital or a team conflict.
Initially, GTE and MegaETH were deeply intertwined, with GTE built exclusively on MegaETH to leverage its high-performance capabilities (100,000 TPS, sub-millisecond latency). This partnership helped both secure funding and attract attention.
Paradigm, a major investor in GTE, led a $15M Series A round, transforming GTE into an independent entity. Analysts suggest Paradigm may be hedging its bets by decoupling GTE from MegaETH to avoid reliance on a single unproven L2, especially after its Blast investment faced setbacks.
MegaETH's future is uncertain, with no recent activity data and GTE's departure raising questions. Meanwhile, GTE faces skepticism about its user base (allegedly bot-heavy) and challenges in building or migrating to a new chain.
The split reflects broader trends in Web3, where capital increasingly empowers applications over infrastructure, reshaping the dynamics between projects and investors. The outcome remains uncertain, but it highlights the crypto ecosystem's competitive evolution.

By Frank, PANews

The cryptocurrency community, which loves to "eat melons," has been abuzz with a recent "breakup" announcement. The decentralized exchange GTE (Global Token Exchange) has officially announced its separation from its underlying Layer 2 network, MegaETH, and the possibility of launching its own mainnet. This sudden change has sparked widespread discussion and speculation within the community.

Some people believe that this is a "team fight" caused by differences in ideas or conflicts of interest, while others keenly point out that this may be a well-considered strategic bet by top venture capital firm Paradigm in the L2 track.

Is this breakup a breakdown in partnership or a strategic shift driven by capital? When what once seemed like a perfect match between a "killer app" and a "high-performance public blockchain" part ways, what lies ahead for each?

The Beginning of Symbiosis: A "High-Performance" Narrative of a Natural Match

To understand this breakup, we may need to first explore why GTE and MegaETH were deeply bound in the first place, and the “high-performance” narrative they jointly constructed.

At its inception, GTE had a similar vision to Hyperliquid: to maintain its core decentralized, non-custodial nature while providing transaction speeds and an experience comparable to top centralized exchanges like Binance and Coinbase. To achieve this goal, GTE adopted the centralized limit order book (CLOB) model commonly found in traditional financial markets to address the pain points of traditional DEXs, such as high latency, high slippage, and high transaction costs.

Underpinning this ambition is a team of renowned individuals. According to official sources, its core members hail from leading global financial and technology giants such as Citadel, Nasdaq, Google, Jump, and Palantir.

For the GTE team, to achieve the above experience, it must be built on a public chain with extremely high performance. Most existing public chains seem to find it difficult to support such a goal.

MegaETH is an Ethereum Layer 2 designed for extreme performance. It utilizes Optimistic Rollup technology, aiming to push the EVM's performance to the limits of hardware. MegaETH publicly claimed its network could achieve a throughput of up to 100,000 transactions per second (TPS) with sub-millisecond latency, far exceeding all other major blockchains at the time. To achieve this, MegaETH employs an innovative architecture that includes a centralized sequencer and parallel processing, specifically designed for real-time applications such as high-frequency trading and fully on-chain gaming.

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

Initially, GTE's relationship with MegaETH was deeply intertwined, with GTE described as a project incubated by MegaETH Labs and built exclusively and exclusively on MegaETH. GTE co-founder Enzo Coglitore publicly stated that, given GTE's extreme infrastructure requirements, "MegaETH is the only blockchain that can provide the required performance."

This bundling strategy of "revolutionary applications require a revolutionary public chain" proved highly successful. Between late 2024 and early 2025, MegaETH and GTE each secured $10 million in funding. On March 21, 2025, the MegaETH public testnet officially launched, demonstrating 20,000 TPS performance. GTE, its first major application, attracted a significant user base and significant attention, validating the feasibility of MegaETH's high-performance narrative.

Behind the separation, there may be a renewed bet by Paradigm

In May 2025, MegaETH's official X account was hacked, causing many users to mistakenly click on fraudulent links. During this period, GTE testing was in full swing. Officials stated that within the past three to four months, the goal of over one million testnet users had been achieved.

Furthermore, GTE's outstanding performance also earned it favor in the capital market. In June 2025, Paradigm exclusively led GTE's $15 million Series A funding round. This infusion of capital brought GTE's total funding to over $25 million, fundamentally transforming its strategic position. It leapt from an incubation 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 and its independence.

However, this breakup seems somewhat awkward. GTE stated on its official social media account: "GTE has grown and is now disengaging from the Mega Mafia." Many viewed this as a tactical move. Some on Twitter commented that this was a "non-existent application leaving a non-existent chain," implying that most of its so-called users were bots.

Of course, the main reason for this may be Paradigm, one of GTE's recent investors. As a prominent investor in the crypto space, Paradigm has a track record of success with investments such as Uniswap, dYdX, and Coinbase. However, in the past year or two, Paradigm's investment vision seems to have faltered, particularly during the rise and fall of Blur and Blast.

Blast, a Paradigm project focused on for nearly two years, rapidly gained popularity thanks to its innovative native revenue model, reaching a TVL exceeding $2.7 billion in just six months. However, its popularity was short-lived. Due to user dissatisfaction with its token airdrop mechanism and frequent security incidents within the ecosystem, Blast's ecosystem rapidly declined. By July 2025, its TVL had plummeted 96% from a peak of $2.7 billion to approximately $105 million, and its daily active users had plummeted from 180,000 to less than 4,000. Its token price also collapsed, dropping nearly 90%.

As a major investor in Blast, Paradigm undoubtedly learned a profound lesson: deeply tying a promising application to a single, unproven L2 infrastructure presents enormous systemic risks. The success or failure of the L2 infrastructure could become a single point of failure for the entire portfolio.

Therefore, the most rational investment decision isn't simply to invest in GTE, but to invest enough capital to enable it to break free from its reliance on a single infrastructure. This shifts Paradigm's bet from the uncertain question of "whether L2 can succeed" to the more certain question of "whether an elite application team can succeed." Furthermore, if an independent portal builds its own chain, the project's valuation will rise from a single DAPP to a public chain, boosting its post-TGE valuation.

However, Paradigm has more to consider in this investment. In addition to GTE, Paradigm also led a $225 million funding round for Monad, a high-performance L1 public blockchain and direct competitor to MegaETH. With GTE now diverging from MegaETH and potentially transitioning to Monad in the future, the deep integration of these two highly sought-after projects could achieve a similar effect to Hyperliquiquit. This strategic approach ensures Paradigm's success, regardless of whether the L1, L2, or application-built blockchain model ultimately prevails.

After breaking up, can they both live in peace?

Therefore, the separation of GTE and MegaETH wasn't simply a "team feud"; it was most likely a rational business decision driven by capital. As for MegaETH's current development, it's indeed lackluster. No relevant data is available on mainstream data platforms or specialized Ethereum L2 ecosystem data platforms. The nearly three-month silence and GTE's departure further complicate future development. However, the MegaETH ecosystem also includes projects like Biomes, Noise, and Euphoria. Whether the "MegaMafia" developer accelerator program will support the next star project will be a key focus.

For GTE, breaking up isn't necessarily a perfect option. Within the community, there are questions about its true level of activity, with some users quipping that most of GTE's one million test users are bots. Furthermore, for GTE, whether it builds its own public chain or joins another, it will delay its product launch. At that point, it will face the uncertainty of the new ecosystem and the question of whether its own product can retain enough users.

The separation of GTE and MegaETH epitomizes the evolving complex relationship between capital, applications, and infrastructure in the Web3 world. It signals a shift in venture capital strategies from simply supporting underlying protocols to empowering cutting-edge applications. The implementation of this "fat application" theory, driven by capital, will have a profound impact on the entire public blockchain landscape.

Perhaps, there are no absolute winners or losers in this great separation. It is just another footnote to the continuous evolution and survival of the fittest in the crypto world.