MetronomeDAO revealed that around 6,367 msETH and 4.57 million msUSD, collectively worth $15.7 million, lack proper collateral because of price feed delays in its swap module. This gap accounts for roughly 31% of all msETH and 16% of msUSD tokens circulating, exposing liquidity providers on platforms like Curve and Aerodrome to potential losses if the token prices decline sharply.
The root cause traces back to Chainlink’s oracle, which does not update prices continuously but rather on set thresholds or timers. This created a window where trading bots exploited stale price data to trade against the protocol, generating an unbacked float over several months.
Despite this flaw, Metronome assured that its lending markets, the Morpho and MetBasis products, as well as the core minting protocol, remain unaffected. Meanwhile, msETH’s price tumbled 25% to $1,378 in just 24 hours, with a spike in trading volume to $51.7 million, while msUSD dropped to $0.737, slipping 25% below its peg.
Metronome Synth holds about $10 million in total value locked across Ethereum, Base, and Optimism, down from $17.56 million recently, reflecting a significant loss of confidence. The protocol’s design promised a one-to-one backing of synth tokens by collateral, but this incident underlines risks in oracle reliability that can cascade to liquidity providers.
This material is for information only and does not constitute financial advice.
