Blockaid said MetronomeDAO’s Synth USD (msUSD) traded as much as about 11% below its peg across Ethereum, Base and Optimism. MetronomeDAO later published a post-incident report saying its synthetic asset swap module had become undercollateralized, leaving roughly 6,367 msETH and 4.57 million msUSD without full asset backing, with the impact concentrated in that module.
According to the report, the issue was tied to delays in Chainlink price oracle updates during swap execution, while Metronome’s fee design did not fully account for that variable. The team said the situation was more severe on Base. In response, it has deployed more than $34 million in defensive positions and about $6.5 million in "last exit" liquidity.
MetronomeDAO said that if the depeg reaches roughly 30%, the protocol would be able to buy back and burn enough assets to close the gap. The team has also raised fees across all synthetic trading pairs and upgraded the protocol to support directionally isolated fee settings. It added that treasury buybacks and synthetic asset burns will take priority in restoring 100% collateralization, while MET holder interests and the MET buyback and distribution plan will remain unchanged.
According to Blockaid, MetronomeDAO’s Synth USD (msUSD) at one point traded about 11% below its peg on Ethereum, Base and Optimism.
MetronomeDAO later released a post-incident report saying its synthetic asset swap module had become undercollateralized, leaving about 6,367 msETH and 4.57 million msUSD without full backing. The impact, it said, was mainly limited to that module.
What caused the shortfall
The report said the issue came from delays in Chainlink oracle pricing during swap execution. Metronome added that its fee design had not fully accounted for that variable, with the problem more pronounced on Base.
Measures already deployed
The team said it has put in place more than $34 million in defensive positions and about $6.5 million in "last exit" liquidity. Under its stated framework, if the depeg reaches about 30%, the protocol would be able to buy back and burn enough assets to eliminate the shortfall.
MetronomeDAO also said it has increased fees across all synthetic trading pairs and upgraded the protocol to support directionally isolated fee mechanisms.
Next steps
The team said treasury buybacks and burns of synthetic assets will take priority to restore 100% collateralization. It also said MET token holder interests will not be affected, and the MET buyback and distribution plan will continue as scheduled.
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