MegaETH’s Yield-Bearing USDm Stablecoin Could Subsidize Ethereum Sequencer Fees

• Yield-backed stablecoin: USDm uses Ethena’s USDtb reserves invested in tokenized treasuries to generate yield.

• Yield will be channelled to offset sequencer fees on MegaETH, aiming to reduce end-user transaction costs.

• Key figures: Ethena TVL ~ $13B; BlackRock BUIDL market cap ~ $2.2B; Ethereum fees collected ~ $1.1B (past year).

USDm stablecoin: yield-backed dollar peg from MegaETH and Ethena to subsidize Ethereum sequencer fees — read how it may cut L2 costs and user fees.

The USDm stablecoin, built with Ethena and backed by tokenized treasuries, will use its yield to subsidize Ethereum sequencer fees.

What is the USDm stablecoin?

USDm stablecoin is a yield-bearing dollar-pegged token developed by MegaETH in partnership with Ethena. The design routes reserves into Ethena’s USDtb infrastructure, which allocates capital into tokenized U.S. Treasury instruments to generate steady yield.

How will USDm use yield to lower sequencer fees?

USDm’s reserves are placed in Ethena’s USDtb, which channels assets into BlackRock’s BUIDL tokenized Treasury bill fund (reported market cap ~$2.2B). Yield from those reserves is earmarked to subsidize MegaETH sequencer fees—reducing the sequencer revenue requirement and lowering fees for users.

MegaETH co‑founder Shuyao Kong said USDm would “lower fees for users” and enable “more expressive design space for applications.” This model diverts revenue pressure away from raw transaction fees and toward treasury yields.

Why is this model significant for Layer‑2 economics?

Traditional Layer‑2s rely primarily on sequencer and protocol fees for sustainability. A yield-bearing stablecoin introduces an alternate revenue stream: predictable treasury yield. With Ethena reporting ~$13 billion TVL and RWA.xyz tracking tokenized treasury funds, the approach tests whether on‑chain yield can materially offset gas cost burdens.

When will USDm launch and who is involved?

MegaETH announced the USDm initiative in collaboration with Ethena. Ethena will deploy USDm on its USDtb infrastructure, leveraging tokenized Treasury exposure managed through BlackRock’s BUIDL product as reported by RWA.xyz. A specific public launch date has not been disclosed at the time of publication.

Fees on Ethereum

Sequencer fees — the costs L2 sequencers pay to publish transaction batches to Ethereum — have been a focal point in debates on fee allocation. Token Terminal reports Ethereum collected approximately $1.1 billion in fees over the past calendar year, though collections have declined since February.

Ethereum fees collected. Source: Token Terminal

How might users and applications benefit?

By using USDm yield to reduce sequencer fee pressure, MegaETH aims to lower direct transaction costs for users. Applications could benefit from more predictable fee structures and expanded UX options, since sequencer fee variability would be partially hedged by treasury yield.

Frequently Asked Questions

Will USDm change how Layer‑2s generate revenue?

USDm introduces an auxiliary revenue source: treasury yield. While sequencer fees may still exist, the stablecoin’s yield could reduce reliance on transaction fees, offering a hybrid revenue model for Layer‑2 sustainability.

Is USDm fully backed and how is the peg maintained?

USDm is backed by reserves routed through Ethena’s USDtb infrastructure into tokenized U.S. Treasuries. The peg relies on reserve management, treasury yield, and Ethena’s protocol mechanisms to maintain stable parity with the dollar.

Key Takeaways

• USDm introduces treasury yield: Leverages Ethena’s USDtb and tokenized Treasuries to produce yield.
• Sequencer fee subsidy: Yield is earmarked to offset MegaETH sequencer fees, potentially lowering user costs.
• Industry context: Ethena (reported TVL ~$13B), BlackRock BUIDL (~$2.2B), and Token Terminal fee data underpin the model’s rationale.

Conclusion

USDm represents an experimental shift in Layer‑2 monetization by converting reserve yield into a mechanism that can subsidize sequencer fees. The approach combines Ethena’s yield-bearing infrastructure with MegaETH’s L2 execution to test whether tokenized Treasury returns can sustainably reduce user fees. Readers should monitor official MegaETH and Ethena announcements and on‑chain metrics for updates.

Published by COINOTAG on 2025-09-08. Updated 2025-09-08. Sources: Ethena, RWA.xyz, BlackRock BUIDL, Token Terminal. Expert quote: Shuyao Kong, MegaETH co‑founder.