MEGA, the organization behind the Ethereum Layer 2 network formerly known as MegaETH, has laid off 20% of its workforce while announcing a $30 million investment in a new artificial intelligence venture. This move signals a significant strategic pivot for a platform originally focused on high-speed blockchain infrastructure.
Shift in Strategy Follows Rebrand and New AI Focus
In a statement released November 13, co-founder Shuyao Kong reported that months of internal restructuring led to staff reductions across blockchain development, wallet operations, ecosystem support, and communications. However, the company’s founding team and core engineers remain in place.
The layoffs came just days after MegaETH rebranded as MEGA and revealed plans to launch an AI inference marketplace in December. This rollout will be supported by a $30 million investment, sourced from the organization’s own treasury and products built atop the MegaETH network.
Recent developments come amid broader shifts in the Ethereum ecosystem. Earlier this year, the Ethereum Foundation also cut its workforce by 20%, reflecting new pressures within the competitive Layer 2 landscape.
MEGA does not plan to develop its own artificial intelligence models. Instead, its upcoming marketplace is designed to connect customers with various providers offering computing power for operating advanced AI systems.
Kong did not specify the exact number of employees affected by the restructuring or offer a financial rationale for the cutbacks.
MEGA’s leadership confirmed that while downsizing affected several teams, the organization remains committed to integrating artificial intelligence into its operations and sustaining key engineering functions.
Ethereum Scaling Drives Competitive Pressure
Ethereum Layer 2 solutions, including MegaETH, play a major role in handling the bulk of transaction volume across the ecosystem. These evolving networks have created heightened competition among projects specializing in scaling solutions.
MegaETH, now MEGA, originally aimed to deliver rapid transaction speeds combined with the security of the Ethereum base layer. However, developers in the Layer 2 ecosystem now face growing scrutiny from both users and prominent figures, such as Ethereum co-founder Vitalik Buterin, questioning the long-term necessity of competing solely on speed.
Mini dictionary: Layer 2 network — A secondary framework or protocol built on top of an existing blockchain, such as Ethereum, designed to increase scalability and efficiency by processing transactions off the main chain.
Unlike previous efforts focused on infrastructure, MEGA’s planned AI product aims to solve trust issues in artificial intelligence marketplaces, where customers may not be able to verify that providers use the correct models or handle sensitive data safely.
These new services will be deployed on the existing MegaETH blockchain, rather than replacing the original infrastructure.
Future Plans and Challenges for MEGA
MEGA has outlined a roadmap that includes faster transaction finality, sequencer rotation, and greater decentralization gains. These improvements are expected to be introduced progressively through the first quarter of 2027.
For token holders, a central concern is whether MEGA’s new AI business will generate real demand for the token or simply broaden the project’s portfolio without increasing value.
The outcome remains uncertain, as the launch of new AI-driven services does not guarantee higher token prices or additional utility within the larger cryptocurrency market.
Other projects such as Base, a Layer 2 network incubated by Coinbase, have already adjusted their technical directions in response to changes across the blockchain sector.
While MEGA pushes ahead with its AI venture, the move underscores how Layer 2 projects are evolving to adapt to market realities and growing competition driven by the rapid pace of development in the Ethereum ecosystem.
