M^0 Protocol Unveils White Paper, Targets $5-$20 Trillion Offshore Dollar Market

The protocol, which is set to go live in Q2 2024, aims to tap into the $5-$20 trillion offshore dollar market.

M^0, a protocol that empowers global institutions to create fungible T-bills backed stablecoins, has recently launched its white paper, website, and additional protocol details.

The team behind M^0, which includes notable stablecoin innovators from MakerDAO and Circle, came out of stealth mode last year with a robust seed funding round of $22.5 million, led by Pantera Capital.

The ongoing trend of tokenization has led to an increase in blockchain-based Treasuries and other unique items, such as yield-bearing stablecoins, being developed by entities ranging from start-ups to Wall Street banks. However, these companies are merely increasing the number of their products that are shipped on-chain, according to M^0 Labs CEO Luca Prosperi. Prosperi, a former community leader at MakerDAO, argues against the idea of a centralized party minting stablecoins and continuing to fractionalize liquidity. As a result, M^0 incorporates some of MakerDAO’s original concepts but adapts them to be more institutional.

“We’re attempting to rebuild networks, with rules and smart contracts that allow people to interact and generate digital assets,” Prosperi explained in an interview. “Consider the protocol as a governor of the Eurodollar system; a set of rules that enable a new generation of offshore dollar players to engage. The protocol collects certain fees that are then distributed on-chain to various participants, but the majority of the benefits remain with the actors that actually interact with it,” he further added.

M^0 is setting its sights on the $5-$20 trillion offshore dollar market. Joao Reginatto, M^0 Labs Chief Strategy Officer and former VP of stablecoins at Circle, criticized the lack of interoperability among stablecoins as “pretty ridiculous”. “Some people are trying to reposition their stablecoin projects as infrastructure, but these pitches are still superficial. You can’t call it infrastructure if you have to be married to the issuer. We believe the solution is multi-issuance, where an issuer in its respective jurisdiction complies with the individual regime, and they all issue fungible tokens,” he stated.

The M^0 protocol is scheduled to launch in Q2 2024. The anticipated initial user base includes crypto-friendly institutions, funds invested in decentralized finance (DeFi), and market makers. However, Prosperi envisions a future where protocols become the back-end of financial technology companies.