M^0 Integrates with Usual to Expand Stablecoin Ecosystem

M^0, the stablecoin infrastructure provider, has signed its second integration deal with the rapidly growing fiat-backed stablecoin issuer, Usual. This partnership diversifies Usual’s reserves, which were originally supported solely by the tokenized money market fund Hashnote, developed by the founders of DRW.

Launched four months ago, Usual has quickly risen in prominence, surpassing $1 billion in market capitalization on Wednesday, making it the seventh-largest stablecoin. M^0 (pronounced M Zero) has also experienced significant growth since its inception earlier this year.

In an interview with The Block, M^0 co-founder Gregory Di Prisco mentioned, “There are a few extensions in the pipeline. 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 emphasized that the middleware platform allows users to create customizable extensions using its U.S. Treasury-backed M stablecoin platform, potentially leading to a self-serve model. He stated, “Every time we add a piece of customization, it becomes stock. So the compliance features we added for Usual, now those are audited and we could offer those to everybody.” Among these features are the capabilities to blacklist addresses and unwrap UsualM tokens to M.

Usual’s CEO Pierre Person expressed the significance of the integration, stating, “Integrating $M as the foundation for UsualM marks a pivotal step in advancing our vision for stablecoins. With UsualM, we’re not just introducing another stablecoin — we’re redefining how digital dollars can generate meaningful value and impact.”

Earlier this month, the Cosmos-based Noble blockchain launched the first dollar-denominated token, USDN, using M^0’s technology. Di Prisco mentioned, “The Noble dollar is on Cosmos. Usual is on Ethereum. And we’re going to Solana very soon.” They are collaborating with Wormhole to ensure compatibility across multiple chains.

M^0 is a protocol that operates entirely on-chain, providing features including on-chain liquidity and automated yield distribution via smart contracts—aiming to appeal more to decentralized application (dApp) developers and advanced fintechs.

In June, M^0 announced raising $35 million in a Series A funding round led by Bain Capital Crypto, with participation from market makers such as Galaxy Ventures and Wintermute Ventures. Currently, only entities that financially backed M^0 hold the POWER tokens needed for protocol governance.

How Does M Work?

Di Prisco explained that M^0’s governance system is designed to combat voter apathy by requiring every POWER token holder to vote at least once a month. Failure to do so results in a 10% slashing of their tokens, which are then auctioned off and redistributed in wrapped ETH to other token holders.

The protocol incentivizes voting with ZERO token rewards. These tokens, currently locked up for investors until next year, can be earned through voting and represent the economic flows of the protocol.

M is defined as “the most perfect approximation of holding low-risk money.” Each issuer in the network establishes their own orphaned special purpose bankruptcy remote vehicle to hold T-bills and subsequently directs the earned yield to pay an “interest rate” on the M tokens generated within the protocol.

The network’s governance sets an “earner rate,” which is paid to a select group of whitelisted addresses. Di Prisco sums it up, saying, “Think of M as the abstraction in the back end of all the collateral management. The yield serves as a building block for these other stablecoins that have brands on them.” He emphasizes that all applications will require full control over the feature set and yield distribution of the stablecoins in their ecosystem, including customizations such as compliance functions and permission lists.

“If you’re even considering a branded stablecoin, you have to talk to us,” he concluded.

Editor’s note: Clarifies how slashed funds are distributed.