MetronomeDAO says msUSD traded about 11% below peg after swap module shortfall

MetronomeDAO said a post-mortem found roughly 6,367 msETH and 4.57 million msUSD in circulation, worth about $15.7 million at current prices, have no collateral behind them after trading bots spent months exploiting delayed price data in the protocol’s zero-slippage swap module. The gap equals about 31% of all msETH and 16% of all msUSD outstanding, and Metronome said any realized losses would fall on liquidity providers in pools on venues such as Curve and Aerodrome if the tokens drop further in price. The protocol said the issue is confined to its swap module and that its Morpho lending markets, MetBasis product and core minting system continue to function normally. Metronome attributed the shortfall mainly to stale Chainlink ETH/USD oracle updates, particularly on Base, where it said the feed spent 18.5% of all minutes outside its 0.15% accuracy band since launch and response times worsened sharply in 2026. Metronome said it has effectively paused swapping by sharply raising fees, built treasury-backed defensive positions intended to profit if the synths fall below their reference prices, and plans to use protocol revenue and possible partner capital to buy back and burn unbacked tokens over time.