MetronomeDAO's msUSD deviated from its peg by 11% due to an under-collateralization issue in the synthetic asset module.

According to ChainCatcher, Blockaid monitoring shows that MetronomeDAO's Synth USD (msUSD) traded approximately 11% below its peg on Ethereum, Base, and Optimism. MetronomeDAO later published a report stating that the synthetic asset swap module suffered from insufficient collateral, resulting in about 6,367 msETH and 4.57 million msUSD lacking proper backing, with the primary impact focused on this module.

The report indicated that the issue originated from delays in Chainlink's price oracle during swap execution, and Metronome's fee structure failed to adequately account for this variable, especially on the Base chain where the situation was more severe. The team has deployed over $34 million in defensive positions and around $6.5 million in "last exit" liquidity. If the peg depegs by around 30%, they can repurchase and burn enough assets to close the gap. The team has increased fees for all synthetic trading pairs and upgraded the protocol to support directional fee segregation. They will prioritize treasury repurchases and burning of synthetic assets to restore 100% collateralization, while MET token holders’ rights will not be affected; MET buyback and allocation plans will proceed as usual.