MetronomeDAO's msUSD Slips 11% Below Peg After Undercollateralized Synthetic Swap Module

ChainCatcher reports, citing Blockaid monitoring, that MetronomeDAO's Synth USD (msUSD) briefly traded about 11% below its peg across Ethereum, Base and Optimism. In a post-incident report, MetronomeDAO said its synthetic-asset swap module became undercollateralized, leaving roughly 6,367 msETH and 4.57 million msUSD without sufficient backing. The protocol said the impact was largely contained within that module. Metronome attributed the shortfall to delays in Chainlink price-oracle updates during swap execution, combined with a fee structure that did not adequately account for that risk, particularly on Base. The team said it has deployed more than $34 million in defensive positions and about $6.5 million in "last-resort" liquidity. It added that these resources could be used to buy back and burn enough assets to close the gap if the peg were to fall by around 30%. Metronome has raised fees across all synthetic trading pairs and upgraded the protocol to support directionally isolated fee mechanisms. The team said restoring full collateralization will prioritize treasury buybacks and burns of synthetic assets and will not affect MET token holders' rights; MET buyback and distribution plans will continue as scheduled.