October saw a mild retreat across the crypto markets, with ETH price declining and DeFi activity significantly slowing down. Despite that backdrop, Metronome continued to demonstrate solid fundamentals. Although protocol revenue continued to rise, MET followed the general market trend and went down in price slightly. USD-denominated TVL also decreased with the market, but TVL in ETH terms climbed, indicating that underlying protocol usage remained strong.

This report walks through the changes in MET price and esMET, TVL by chain, protocol revenue and token-holder income, msAsset liquidity and peg quality over the month, liquidity incentives on Aerodrome and Velodrome, and the current treasury allocations.

Although protocol revenue and buybacks were larger in October, the general market sentiment dragged MET price slightly down.

Total MET locked grew quite substantially, around 10% with respect to last month. The average lockup period also increased, showing that MET holders are maintaining conviction and locking their tokens for the maximum period despite market uncertainty.

In dollar terms, TVL moved lower in October, following the broader market downturn. All networks experienced declines, with Base showing the steepest contraction. Despite this, overall participation in Metronome’s markets remained stable, and the drop was largely driven by asset repricing rather than capital outflows.

This becomes more evident when looking at TVL in ETH terms, which shows solid growth during the month. Ethereum mainnet led the increase, offsetting minor declines on Base. The steady accumulation of TVL within Metronome’s markets indicates that msAssets remained actively used and trusted, showing the protocol’s resilience amid broader market weakness.

Protocol revenue grew meaningfully in October, with token-holder income rising at a similar pace. The primary drivers were steady fee generation from msAsset activity and continued earnings from treasury positions in lending and LP markets. Even with lower market volumes, the protocol captured a larger share of on-chain yield, translating into stronger support for esMET streaming.

Mint caps and liquidity conditions remained well balanced. Ample mint headroom on Ethereum, Base, and Optimism will allow for renewed growth once activity picks up. Morpho pools stayed highly utilized through most of the month, which proves that demand for msAssets remains strong.

With the exception of the black swan event on October 10th, peg behavior was broadly solid through the month. In particular, msETH continued to trade very close to target across all pools, rarely deviating outside its narrow range even during periods of volatility.

msUSD also remained stable, but was hit harder during the crash, as heightened volatility primarily affected stablecoin markets. The extreme downsides reflected on the table all happened on October 10th.

The Ethereum Curve pool showed the tightest behavior, while Base pools experienced a few deeper wicks during risk-off sessions. Even so, msUSD spent the vast majority of the period near parity, confirming the effectiveness of liquidity management through incentives.

Liquidity support on Aerodrome and Velodrome remained active, with emissions and incentives on msETH and msUSD pairs.

The table shows native emissions in AERO or VELO and the USDC amounts paid as voter incentives.

Metronome’s protocol-owned treasury declined in October to 17.0 million USD, due to the general drop in asset prices across DeFi. The structure of the treasury, however, remained largely intact, continuing to center around liquidity provision and yield generation as the main sources of recurring income.

Liquidity positions on DEXs remained the largest allocation by a wide margin. These pools, located primarily on Aerodrome, Velodrome, and Curve, continue to anchor trading activity for msAssets and MET. Lending on Metronome Markets and yield vaults followed similar patterns, both decreasing modestly in line with market repricing.

Direct holdings increased relative to September, now representing about a quarter of the total portfolio. Meanwhile governance positions in veAERO, veVELO, CVX, and veCRV decreased by a similar amount.

External lending rose modestly as part of a broader effort to maintain a steady yield and diversify income sources. Smaller allocations in leveraged LPs and farming wrappers remained roughly unchanged and continued to play only a minor role in the overall profile.

Despite the market contraction, the treasury remains liquid and continues to generate yield, with capital spread across the same core areas that have supported Metronome’s income growth throughout the year. Its liquidity base supports msAsset stability, and funds ongoing incentives and MET buybacks.

Although October was generally a weak month for DeFi, Metronome weathered the storm with little impact, and several performance indicators even show improvement. Protocol revenue expanded strongly, supported by the steady performance of the treasury, while ETH-denominated TVL climbed to a new high despite lower USD valuations.

Treasury operations continued to play a central role in sustaining Metronome’s growth. By funding liquidity incentives, the treasury reinforces the stability of msAssets, which in turn encourages greater usage and higher TVL. Rising activity then feeds back into higher protocol revenue, further strengthening the treasury’s capacity to support incentives and MET buybacks. This cycle continues to generate substantial yields for long-term MET lockers.