This is the inaugural monthly report in a series that will cover all Bloq DeFi protocols. Beginning with August, we’ll publish protocol reports in the first days of each month for Vesper, Metronome, and Odyssey. This edition reviews Metronome’s August performance using on-chain metrics to assess usage, and token performance, and peg quality of msAssets.

The main driver of August activity was Odyssey adoption. Odyssey’s Loopr module offers multiple strategies built on Metronome synths, which was a major contributor to TVL this month. Moreover, broader market tailwinds with renewed interest in stablecoins and Ethereum likely helped raise several of the metrics we track.

Despite strong growth, capacity remained ahead of demand, with ample mint headroom and Morpho liquidity. Additional usage translated into higher protocol fees and supported MET distributions. Execution was stable overall: msETH held near parity throughout the month, while msUSD showed wider deviations, particularly on Ethereum mainnet. Let’s look at it in more detail:

MET’s market cap grew substantially in August, outpacing ETH over the same period. The driver was likely the earnings outlook, as protocol revenue rose sharply for the month, raising expectations for MET buybacks. That made holding MET more attractive, strengthening demand and pushing the price higher.

The increase in protocol revenue can be explained by an expansion in TVL, which grew around 31.5% in August to ~$59.5m. The bulk of this growth took place on Ethereum and Base. One of the largest drivers of this growth was Odyssey, which continued to use msETH and msUSD for multiple strategies inside the Loopr module. The current high TVL will likely increase the treasury’s capacity to fund future MET buybacks.

Examining ETH-denominated TVL, we see that ETH’s appreciation explains some of the TVL growth shown in the previous table. Most of the increase occurred on Ethereum and Base, consistent with Odyssey’s footprint. More loops meant more msETH minted and/or borrowed, which increased on-chain balances independent of ETH’s USD price. Optimism trails, matching lighter Odyssey routing there.

Protocol revenue stepped up to about $0.91M in August, a huge 125% jump with respect to July. As we mentioned before, the driver was more activity and TVL on Metronome. In total, $55,000 was allocated to buy-and-stream 100,329 MET to esMET holders.

Mint allowances on Metronome and available Morpho liquidity show that the system has the capacity to absorb more minting, and borrowing. This is important in order to maintain the TVL growth of the past few months, and helps keep pegs orderly via arbitrage.

Peg stability matters because msAssets are commonly borrowed for loops and other strategies. When the price drifts away from $1, strategy returns can be distorted. For example, borrowing well below peg and later unwinding at peg can erase a meaningful portion of the position. In August, msETH pools on Base (Aerodrome) and Ethereum mainnet (Curve) tracked close to parity for most of the month. msUSD on Base was similarly orderly, while msUSD on Ethereum showed wider excursions.

MET incentives are used to deepen the key msAsset LPs and stabilize their value. Liquidity providers on the prioritized pools can earn MET on top of pool fees. At the moment these are: Curve on mainnet, Aerodrome on Base, and Velodrome on Optimism. Additionally, some lending protocols (e.g., ExtraFi, Impermax) also run MET rewards.