Decentralized finance (DeFi) has captured the imaginations of technologists, economists, press and pundits. It comes as further evidence that, where once open-source systems were either sold to or adopted by the financial industry, they are now coming after the conventional financial system itself.
Metronome launched as the world’s first autonomous digital asset in 2018, right in the middle of crypto winter and long before the term “DeFi” gained primacy in the cryptosphere.
At launch, Metronome possessed the following qualities:
- Autonomous — Predictable mintage, similar to a “computerized Fed” as suggested by Milton Friedman.
- DeFi Asset — Supports advanced on-chain payment functionality, such as subscriptions and mass-pay, programmability and portability to move between chains.
- Decentralized Exchange (DEX) — An Autonomous Converter that allows MET to be exchanged for its chain’s token and vice versa.
- Total Value Locked (TVL) — Two smart contracts that represent the concept of TVL: one that accumulates the daily MET auction proceeds, and the Autonomous Converter that receives 25 basis points from that Proceeds contract daily.
If the above sounds like DeFi, that’s because it is in all the ways that count.
But there’s a lot more going on here. Much of what one sees in the DeFi space is certainly decentralized and offers modern expressions of financial products. But “decentralized” does not necessarily mean “autonomous,” that is, a set-and-forget system that provides a reliable and complete monetary system unto itself. This, we believe, is a necessary component in the emerging DeFi ecosystem. Further, the vast majority of DeFi is only as decentralized to the degree Ethereum is. Metronome points to this future state.
Whether serving DeFi’s current requirements for a stable, autonomous monetary system, or providing a more future-proof foundation for same, Metronome is an asset built for DeFi. In future posts, we can lay out how this might work architecturally in the DeFi Stack.
Jordan Kruger is the managing director for Metronome.