Add msUSD/fxUSD pool on Ethereum to the Gauge Controller

Gauge Proposals
1

Gauge Proposal Template:

Summary:

Add msUSD/fxUSD pool on Ethereum to the Gauge Controller.

References/Useful links:

Link to:

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.

Motivation:

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.

Specifications:

Please answer in a short and clear manner.

    • 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).

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