Bain Capital Crypto leads $35 million Series A for stablecoin minting protocol M^0

M^0 (pronounced "M Zero"), a decentralized stablecoin minting protocol, has raised $35 million in a Series A funding round led by Bain Capital Crypto.

Other investors in the round included Galaxy Ventures, Wintermute Ventures, GSR, Caladan and SCB 10X, M^0 said Wednesday. The project began raising for the round in late January and closed it in early May, Luca Prosperi, president of the M^0 Foundation Council, told The Block.

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, Prosperi said. He added that this lock-in period is in line with "prudent business and regulatory practices." He declined to comment on the valuation.

M^0's Series A round comes over a year after it raised $22.5 million in a seed funding round led by Pantera Capital in April 2023. The Series A round brings M^0's total funding to $57.5 million. Prosperi noted that the demand for the Series A round was 2.5 times the amount raised.

What is M^0?

M^0 is a stablecoin minting protocol based on Ethereum where approved entities can create a stablecoin called M, which is "overcollateralized by U.S. Treasuries only." To mint M, entities need permission from the protocol's governance. Once approved, they provide their own standardized "high-quality" collateral, which independent validators check to ensure it meets the standards.

The M^0 protocol has been deployed on the Ethereum mainnet and will go live in the coming weeks, Prosperi said. The first minter and validator have also been approved, with details to be disclosed later.

"Any entity can ask to be permissioned and become a minter, but needs to be approved by governance," Prosperi said, adding that entities must comply with M^0's "adopted guidances," which will be released soon.

Prosperi noted that other stablecoin issuers, such as Agora and Mountain, could also join the protocol and mint M according to M^0 standards. "M^0 is actually a network that can connect all those compatible issuers," he said.

As for the M stablecoin's reserves, they must be held in bankruptcy-remote vehicles managed by special purpose vehicle operators that are separate from minters, Prosperi said. These reserves will be validated and published daily by approved validators in the M^0 system, he added.

M^0 launch

While the M^0 protocol will initially launch on Ethereum, Prosperi said that the M stablecoin could eventually be made available on other Layer 1 and Layer 2 networks. The M^0 team is currently working on its multichain strategy. The team is led by former MakerDAO and Circle employees.

There are currently more than 50 people working for M^0, and Prosperi is looking to expand the team across functions, including engineering, legal, business development and operations.

As part of the Series A round, Bain Capital Crypto has taken a board seat at M^0, alongside Pantera Capital, Road Capital and AirTree, Prosperi said.

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