Blockaid said MetronomeDAO's Synth USD msUSD briefly traded about 11% below its peg on Ethereum, Base, and Optimism. According to ChainCatcher, MetronomeDAO later said its synthetic asset swap module had insufficient collateral, leaving about 6,367 msETH and 4.57 million msUSD without full asset backing, with the impact concentrated in that module.
The report said the issue stemmed from a delay in Chainlink price oracles during swap execution, while Metronome's fee design did not adequately account for that variable, with the problem more severe on Base. The team said it has deployed more than $34 million in defensive positions and about $6.5 million in last-exit liquidity, and that a roughly 30% depeg would allow enough assets to be bought back and burned to eliminate the shortfall.
MetronomeDAO said it has raised fees on all synthetic trading pairs and upgraded the protocol to support directionally isolated fees. It added that it will prioritize treasury buybacks and burns of synthetic assets to restore full collateralization, while keeping MET holder rights unchanged and maintaining its MET buyback and distribution plan.