What is Metronome? (MET)
Metronomes are one of the most popular tools in music as they help musicians keep a steady beat. But did you know that there’s a cryptocurrency named Metronome?
It’s not nearly as popular nor as reliable as the device used by musicians all around the world. It still exists, though, and it’s certainly a cryptocurrency worth discussing. This article will cover absolutely everything you need to know about Metronome (MET) including the tumultuous history of the project along with the investment projects of MET.
What is Metronome (MET)?
Metronome is not your run of the mill scam project launched by anonymous developers that rug almost immediately. Metronome has a fully doxxed team behind it and was actually founded by a well-known name in the Bitcoin community, c.
For those that don’t know, Garzik was a core developer of Bitcoin in the early days of the cryptocurrency that was ousted after the failure to upgrade Bitcoin to SegWit2x caused in-fighting amongst Bitcoin core developers. He eventually launched his own fork of Bitcoin UnitedBitcoin, which failed almost immediately after its December 2017 launch.
While working on United Bitcoin, Garzik launched a separate project called Metronome around October 2017 via an ICO on Ethereum. The project also had a fairly substantial premine that went straight to the founders. Additionally, it was an inflationary token (inflation pegged at 2% forever).
Metronome tried to spin the inflationary nature of Metronome aa a positive by stating that, “Metronome is predictable and mints new MET at a predictable rate.” This does not make much sense because Bitcoin also mints new BTC at a predictable rate (50 BTC per 10 minutes; cut in half every ~4 years). Bitcoin is also deflationary, so we are not seeing the benefit of Metronome being inflationary.
More importantly, MET is minted by the team selling 2,880 MET in a reverse auction everyday.
The stated goal of this iteration of Metronome was to become a token that could be moved across different blockchains. This obviously never materialized and the project collapsed.
Anyway, the first iteration of Metronome failed and Garzick focused on other projects. He’s also the CEO and co-founder of Bloq.
This was not the end of Metronome, though.
The project was relaunched in 2021 right around when the cryptocurrency started picking up again – surely a coincidence.
Now, did the project that already failed once change anything about the project before launching again?
Well, they changed their whitepaper (owner’s guide as they call it), but they did not actually deliver on any of the promises. Basically, MET 2.0 relaunched as a DeFi protocol with its own DAO and completely failed at that as well.
It’s almost humorous how this project has failed twice. We will give credit where credit is due and say that Metronome 1.0 introduced some ideas to DeFi. However, the project appeared more focused on making gains in the short term rather than building anything of value.
Our Problems With Metronome
Admittedly, we are not fully familiar with Metronome. This is partially because the project has not really done a great job explaining what it actually does in objective terms. Instead, the project uses grand marketing terms to hype itself up, which is somewhat common in the cryptocurrency/startup industry.
Anyway, here are some of our biggest problems with Metronome.
Note: Metronome 1.0 transitioned to Metronome 2.0. This is important in itself because Metronome 1.0 claimed it would be around for 100 to 1,000 years – it did not even make it four years.
What is The Point of This Cryptocurrency?
We have pored over the Twitter account and whitepaper for Metronome and still do not see much of a use case for this cryptocurrency. The Twitter account constantly mentions that it’s a better DeFi currency, but why is it a better DeFi currency?
That reason is never really expanded on in a concise manner, which makes us suspicious. If a project cannot explain the purpose of the project in a concise manner, then it probably does not have much of a purpose.
The White Paper is A Lot of Hype
This was mentioned in the introduction, but it’s worth repeating and expanding on this criticism as it’s a big one.
Metronome hypes itself up a lot.
So, what’s the problem with hyping your project up?
It sets unrealistic expectations for the project and sends a bad message about the project’s leadership. These hype statements might do a good job attracting those unfamiliar with cryptocurrency into the project, but those familiar with cryptocurrency will see through the hype and realize that the project offers nothing.
Here are some examples of Metronome 1.0 hyping itself up in its whitepaper.
“Metronome is predictable and mints new MET at a predictable rate, which makes it stable”
The first inaccurate statement published in the Metronome 1.0 whitepaper is quoted above. In simple terms, it states that Metronome is stable and predictable because it is minted at a predictable rate.
The whitepaper then goes on to explain how other cryptocurrencies are not predictable nor stable because they are presumably not minted at a stable rate. But all the cryptocurrencies cited are minted at a stable rate.
Bitcoin is mined at a stable rate as stated in the Metronome 1.0 whitepaper. Ethereum, Ripple, and Monero are also minted at a stable rate. Moreover, Ethereum is inflationary just like Metronome 1.0.
More importantly, the supply is not the sole factor that determines whether a currency is stable. Demand also plays a role in determining stability. In fact, demand is likely a bigger factor in stability than supply. If a currency has a lot of demand, then the price will likely remain stable or increase barring any drastic increases in supply.
To summarize this point, all cryptocurrencies have a predictable supply rate. Users are not planning out decades in advance the value of their cryptocurrency. If they are, then it’s probably better to have a deflationary cryptocurrency like Bitcoin rather than an inflationary one like Metronome.
This entire argument by Metronome 1.0 falls flat on its face and is most likely used to confuse newcomers to the space or those unfamiliar with economics.
“We believe Metronome is the 1,000 year cryptocurrency”
This is an absolutely ridiculous statement. How many currencies have existed for 1,000 years?
The pound sterling has existed for over 1,000 years. However, it has undergone a lot of changes in the past 1,100 years of its existence. In fact, the current iteration of the pound sterling (ie. the fiat pound sterling) has only existed since 1931.
With the speed at which technology is changing, we find it highly unlikely that any cryptocurrency will be around for 1,000 years. Especially an inflationary currency like Metronome.
Another major issue we have with Metronome is that it’s a pre-minted cryptocurrency. For those unfamiliar with the term, this means that the founders allocated themselves a percentage of the total supply when they launched the cryptocurrency.
In the case of Metronome 1.0, the pre-mint was 20% going directly to the founders.
This is ridiculous in our opinion. Bitcoin had no pre-mint though it is suspected that Satoshi Nakamoto minted a lot of the early Bitcoin blocks. Nakamoto has never moved the Bitcoin out of these wallets, so he did not receive any economic benefit from this.
Moreover, we find it ridiculous that Metronome claims, “ensuring equal access to token distribution” as a goal of the project.
How is pre-minting 20% of the total supply ensuring equal token access?
The actions of the development team do not match their words. If they truly cared about creating an autonomous cryptocurrency, then they would do what Satoshi Nakamoto did when he launched Bitcoin.
Of course, no cryptocurrency other than Bitcoin has actually done that because founders generally want to receive compensation.
Keynesian Economics (Inflation is Good?)
Our other major concern with Metronome is that the whitepaper makes an argument for Keynesian economics. Explaining Keynesian economics goes far beyond the scope of the article.
The basics are that Keynesians argue that inflation is a necessary component of currency in order to stimulate spending and the economy by extension of that. People are forced to spend money otherwise it will devalue in their bank account (or under their mattress) due to inflation.
Metronome 1.0 uses this argument in their whitepaper.
The part that Metronome 1.0’s whitepaper fails to mention is that Keynessian economics can somewhat work when there is a central bank that can reduce runaway inflation by tightening the monetary supply. Metronome does not have this mechanism built into it.
It actually has the opposite because MET is sold in a Dutch auction. That’s an auction that starts at a maximum price and decreases until someone purchases the lot.
What will happen is that a decrease in demand for MET will cause runaway inflation as the price people are willing to pay during the Dutch auction decreases. The cryptocurrency will then become worthless and the loss in value will be far higher than the 2% stated in the whitepaper.
It’s fairly clear that Metronome 1.0 was designed by someone with a fairly limited understanding of economics. Allowing currency to enter circulation by Dutch auction is an absolutely horrible idea and will result in rampant inflation despite the limit of MET that can be minted in a single day being capped.
Yes, the total supply is predictable, but the value of that currency will rapidly decline if too many people start minting it at a low auction price.
To summarize, the Dutch auction minting model of Metronome is horrible. It will cause runaway inflation once the demand for the token decreases.
What is Metronome 2.0?
Metronome 1.0, the currency that the founders believed was a “1,000 year cryptocurrency” lasted only a few years before it migrated to Metronome 2.0.
The main difference between Metronome 1.0 and Metronome 2.0 is that Metronome 2.0 is controlled by a decentralized autonomous organization (DAO). All holders of MET, even those with locked or vested tokens, are eligible to vote in DAO proposals. Proposals only pass if 50% + 1 votes are reached.
The Dutch auctions, which were an absolutely horrible idea, did not migrate to Metronome 2.0. The DAO can vote to enact the Dutch auctions if they like, though.
Is Metronome 2.0 (MET) a Good Investment?
No, Metronome 2.0 is a project that we would avoid. The first iteration of Metronome did not work particularly well, so the founders relaunched it.
However, the lack of economic understanding and leadership from the Metronome 1.0 team makes us very leary about investing in Metronome 2.0. Our analysis of the situation is that Metronome 1.0 switched to Metronome 2.0 because they needed a way to generate hype, and DAOs are currently the big trend in cryptocurrency.
That’s just speculation, but we do not see much benefit of having a DAO. For those that don’t know, DAOs are not actually decentralized. A very small minority usually ends up controlling decision making and some sort of DAO Board of Directors can veto proposals that are not popular.
To summarize, this is not a project we would deem worthy of an investment. And that’s without mentioning the controversial history of Jeff Garzik.
We are not fans of Metronome. Despite that, we will give credit to the developers for not operating under the cover of anonymity. They are public about their association with the project, which is something we wish more founders would do.
That said, we do not view this as a particularly good project and we have some very serious doubts about the leadership ability and economic understanding of the Metronome team.