Introduction

Metronome is proposing to add a FXN gauge to msUSD/fxUSD. Metronome intends to direct a portion of its regular incentivization to this pool, as well as utilize protocol owned liquidity on the pair to establish a veFXN position. Metronome (msUSD, msETH, msBTC) is a long-time incentivizer in the Curve ecosystem as well as the top incentivizer on Aerodrome/Velodrome. This proposal seeks to establish a synergistic relationship between Metronome and f(x) in a similar manner that Metronome supports other ecosystems it engages with.

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References & Useful Links

• Website: https://www.metronome.io

• App: https://app.metronome.io

• Documentation: https://docs.metronome.io

• Curve Pool: Curve.fi - 0x138Bb0f3208bd729a561F3786DDb97BBc69e6628

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Protocol Description

Metronome is a leading multi-collateral / multi-synthetic DeFi ecosystem. Metronome supports borrowing Metronome Synth assets (msAssets) against bluechip, yield-bearing collateral in-app, as well across various 3rd party lending pairs, such as Morpho Blue markets on mainnet and Base.

The msAssets utilize LayerZero’s OFT standard to enable a synchronized, cross-chain experience for open market liquidity. This implementation has enabled msUSD to maintain a consistent foundation on Curve for over 2.5 years while simultaneously establishing dominant positions on Aerodrome and Velodrome.

Most msUSD borrowers participate in “looping” yield strategies, converting their borrowers to more collateral. Metronome maintains strategic partnerships with Vesper, a decentralized yield aggregator, and Odyssey, a unified, one-click leverage yield interface, to tokenize + collateralize APY sources and simplify the borrowing experience for yield farmers.

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Specifications

• Governance: msUSD is governed by MET token holders.

• Oracles: msUSD is minted in borrow-only lending pairs with a price hard coded to USD. This prevents any adverse liquidation scenarios (upwards depeg). In situations where msUSD can be used as collateral in some capacity, lending markets can utilize its Pyth oracle.

• Audits: The Metronome smart contracts have undergone multiple security audits.

• Centralization Risks: Certain administrative features are maintained by the Metronome DAO Treasury multisig. The multisig has some limited privileges, such as adding new collateral assets and minting/burning msUSD into third-party lending pairs (ie: Morpho msUSD vault on mainnet).

• Market History: msUSD is a soft-pegged CDP and has experienced some healthy peg fluctuations. You can refer to DEX history (ie Curve) to see the peg strength over time. Recently, msUSD has stayed within 50~ bps of 1:1 for the past 6 months. (0.996 USD currently).

Further Details

• Backing: Metronome maintains a large and actively managed treasury utilized to drive protocol owned liquidity and distribute incentives.

• Incentivization: Metronome distributes ~$100k/week in dex liquidity incentives, and has consistently incentivized LP since inception. Treasury operations intend to increase this spend via the FXN gauge immediately, with targets of $5k-15k/week, depending on FXN capacity for incentives.

• Protocol Owned Liquidity: Metronome initiated a $100k pool alongside this proposal. The Treasury targets increasing this position to $1mm+ in the weeks following the FXN gauge addition, should this proposal pass.