$16M Shortfall Hits MetronomeDAO as Oracle Lag Exploited by Bots
MetronomeDAO has revealed that its swap module is facing a significant shortfall of approximately $16 million due to oracle lag. This issue arose from trading bots exploiting stale prices on Base, which resulted in the minting of unbacked synthetic assets.
The protocol's investigation found that around 6,367 msETH and 4.57 million msUSD were sitting in the swap module without adequate collateral, accounting for about 31% of the total msETH supply and 16% of msUSD supply.
MetronomeDAO has taken steps to address this issue by deploying defensive looped positions worth over $34 million and injecting emergency protocol-owned liquidity of $6.5 million into the system.
The swap functionality has been paused pending architectural upgrades, and higher fees have been implemented across all synthetic asset pairs as a buffer against future exploitation.