Bain Capital Crypto leads $35M for Stablecoin Protocol

In a Series A funding round sponsored by Bain Capital Crypto, M^0 (pronounced “M Zero”), a decentralized stablecoin minting protocol, has secured $35 million

M^0 disclosed on Wednesday that Galaxy Ventures, Wintermute Ventures, GSR, Caladan, and SCB 10X were the additional investors in the round. President of the M^0 Foundation Council, Luca Prosperi, disclosed to The Block that the initiative initiated fundraising for the round in late January and concluded it in early May.

According to Prosperi, the round was structured as equity plus tokens, with M^0 issuing its two “governance tokens” — POWER and ZERO — to investors, subject to a lock-in period. He further stated that this lock-in period is consistent with “prudent business and regulatory practices.” He declined to provide an opinion regarding the valuation.

M^0’s Series A round takes place more than a year after it raised $22.5 million in a seed funding round anchored by Pantera Capital in April 2023. The Series A round has increased M^0’s total funding to $57.5 million. Prosperi observed that the demand for the Series A round was 2.5 times the amount raised.

What is M^0?

Based on Ethereum, a stablecoin minting protocol known as M^0 allows approved entities to generate a stablecoin named M. This stablecoin is “overcollateralized by U.S. Treasuries only.” Entities require authorization from the protocol’s governance to generate M. Upon approval, they submit their own standardized “high-quality” collateral, which is subsequently verified by independent validators to guarantee that it satisfies the established standards.

Prosperi stated that the M^0 protocol has been deployed on the Ethereum mainnet and will be operational soon. The initial minter and validator have also been approved, with additional information to be disclosed later.

Prosperi stated, “Any entity can request permission to become a minister, but it must be approved by governance.” Additionally, entities must adhere to M^0’s “adopted guidances,” which will be published shortly.

Prosperi observed that other stablecoin issuers, including Agora and Mountain, could also participate in the protocol and mint M by M^0 standards. “M^0 is a network that can connect all those compatible issuers,” said the executive.

Prosperi stated that the M stablecoin’s reserves must be maintained in bankruptcy-remote vehicles overseen by special-purpose vehicle administrators distinct from the minters. He also stated that the M^0 system will be used to validate and publish these reserves daily by approved validators.

M^0 launch

Prosperi stated that the M stablecoin may be made available on other Layer 1 and 2 networks, even though the M^0 protocol will initially launch on Ethereum. Currently, the M^0 team is engaged in developing its multichain strategy. Former employees of Circle and MakerDAO serve as the team’s leaders.

M^0 currently employs over 50 individuals, and Prosperi is expanding its team to encompass a variety of functions, such as engineering, legal, business development, and operations.

According to Prosperi, Bain Capital Crypto has been appointed to the board of M^0 as part of the Series A round, in addition to Pantera Capital, Road Capital, and AirTree.