M^0, the stablecoin infrastructure provider, has inked its second integration deal, this time with the fast-growing, fiat-backed stablecoin issuer Usual. This marks the latest diversification of Usual’s reserves, which were previously backed solely by the tokenized money market fund Hashnote, built by the founders of DRW.
Usual, launched just four months ago, has charted a rocketing path to growth. On Wednesday, it surpassed $1 billion in market capitalization, making it the seventh-largest stablecoin. M^0 (pronounced M Zero) has also seen remarkable growth since launching earlier this year.
“There are a few extensions in the pipeline,” M^0 co-founder Gregory Di Prisco told The Block in an interview. “Putting these deals together comes in two parts: there’s the technical and business side of the equation. From a technical perspective, it’s very fast. We can now throw these things together in a couple of weeks and we’re going to eventually have that down to a couple of minutes.”
Di Prisco noted the middleware platform, which enables users to create customizable “extensions” built using its U.S. Treasury-backed M stablecoin platform, could eventually become “self-serve.”
“Every time we add a piece of customization, it becomes stock,” Di Prisco said. “So the compliance features we added for Usual, now those are audited and we could offer those to everybody.” These features included the ability to blacklist addresses and the ability to unwrap UsualM tokens to M, Di Prisco noted.
“Integrating $M as the foundation for UsualM marks a pivotal step in advancing our vision for stablecoins,” Usual CEO Pierre Person said in a statement. “With UsualM, we’re not just introducing another stablecoin — we’re redefining how digital dollars can generate meaningful value and impact.”
Earlier this month, Cosmos-based Noble blockchain became the first to launch a dollar-denominated token, USDN, using M^0’s tech stack.
“The Noble dollar is on Cosmos. Usual is on Ethereum. And we’re going to Solana very soon,” Di Prisco said. “We’re working with Wormhole to be multi-chain, I wouldn’t say there’s any chain that’s more important than another.”
“We’re a protocol. We do everything onchain,” Di Prisco said about its clientele. “Our liquidity’s onchain. Our yield distribution is entirely automated through smart contracts. We are not trying to put a wrapper around TradFi. So I think our technology appeals a lot more to the dApp space and the more advanced fintechs.”
M0 announced in June that it raised $35 million in a Series A funding round. Bain Capital Crypto led the round, which included participation from market makers Galaxy Ventures, Wintermute Ventures, GSR and Caladan. So far, only entities that financially backed M0 hold the POWER tokens necessary to participate in protocol governance.
How does M work?
Di Prisco said M^0’s governance system was “built from the ground up” to solve “voter apathy.” Every POWER token holder is required to vote on proposals at least once a month, and if they fail to, their tokens will be slashed by 10%, auctioned off and distributed pro rata to the rest of the token holders in wrapped ETH.
It also incentivizes voting by doling out ZERO token rewards. ZERO tokens, currently locked up for investors until next year, can only be earned by voting and are “essentially where all the economic flows of the protocol go,” Di Prisco said.
M is designed to be “ the most perfect approximation of holding low-risk money that you can get,” Di Prisco said. Every issuer in the network sets up their own orphaned “special purpose bankruptcy remote vehicle” to hold T-bills and then direct yield earned on those holdings to pay an “interest rate” on the M they generate to the protocol.
The network’s governance then sets an “earner rate,” paid to a set of whitelisted addresses.
“Think of M as the abstraction in the back end of all the collateral management,” Di Prisco said. “The yield serves a building block for these other stablecoins that have brands on them. That’s really our core thesis, every application is going to want to control the feature set and yield distribution of the stablecoins in their ecosystem,” he said, including customizations like compliance functions, smart contract features and permission lists.
“If you’re even considering a branded stablecoin, you have to talk to us,” he said.
Editor’s note: Clarifies how slashed funds are distributed.
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