M^0 is money middleware for the digital age. And based on a decentralized architecture and best-in-class collateral design, M^0 allows institutions to issue cryptodollars. Pulse 2.0 interviewed Luca Prosperi, who is President of the M^0 Foundation Council and CEO & Co-Founder of M^0 Labs, to learn more.
Luca Prosperi’s Background
Could you tell me more about your background? Prosperi said:
“My name is Luca Prosperi, an investor and financial professional, and a mathematician and economist by background. I have been fascinated by value transmission systems since the beginning of my career. Progressively, from banks to alternative financial institutions to code, my professional journey has been driven by the desire to innovate and enhance these systems. Today, together with the M^0 team, I am dedicated to revolutionizing the most powerful value transmission layer ever designed—money—by open-sourcing it to an infinite range of users and producers.”
“With nearly 20 years of experience, I have built, advised, studied, and invested in financial intermediaries. I started my career as a banks’ strategist at Oliver Wyman, continued after business school to become a financial institution banker at Morgan Stanley, and progressed to invest in various capacities in the sector, before joining the DeFi revolution. To me, DeFi was the first serious attempt to innovate the backend of how finance works, and I joined forces with the movement by contributing in some of the most impactful DeFi protocols, advising some of the most reputable investors operating in the space, and publishing my own research under the Dirt Roads name.”
“Currently, I am the CEO and co-founder of M^0. M^0 intends to be the infrastructure powering the first open federation of digital (or better crypto) dollar issuers. What sets M^0 apart is how it tries to combine what we learned during the first years of technology-led decentralization with the best practices of finance. This translates into an open multi-issuer model (such as in traditional banking) with strict collateral storage standards and an independent validator set to provide on-chain proof-of-reserves, facilitated by the use of a decentralized governance system. With M^0, any entity can connect to the protocol, post eligible collateral in highly safe storage constructs, and issue a fungible cryptodollar called M, benefiting from a single liquidity network.”
Formation Of M^0
How did the idea for M^0 come together? Prosperi shared:
“The idea for M^0 originated from our vision to establish a true Central Bank of DeFi. We wanted to create a set of rules, enforced by smart contracts, that would allow anyone to create money by bringing satisfactory collateral, but doing so in a way that was hyper-transparent, hyper-efficient, and hyper-scalable. DeFi has shown the potential to unbundle fundamental components of traditional banking, and we envision a future where the most efficient sources of leverage can seamlessly merge with the most secure venues for liquidity storage. This promises to fundamentally change the interactions between financial actors and revolutionize the management and allocation of money.”
“It is our belief that traditional financial institutions, in their current configuration, have exhausted their mission in the modern world. The emergence of distributed network technologies such as the internet and the blockchain stack have finally provided the ability to redesign banking and financial intermediation in general in the same way we have reinvented several sectors, from publishing to commerce.”
Favorite Memory
What has been Prosperi’s favorite memory working for the company so far? Prosperi reflected:
“Definitely the first time the M^0 team got together in Berlin. For the first time, a team of more than 30 people joined together to discuss what we wanted to build. I think it was at that time I realized we had started something. I always felt that the superpower required to build something is the ability to get great people together towards a common goal. The energy required to maintain such a social construct is immense, and grows exponentially with the size of the project and the ambition. I have always admired the ability of few large companies to remain laser-focused on what they represent for the world. Being an entrepreneur is an insanely hard job. Someone said that excellence is simply the ability to take pain, and I agree with that.”
Core Products
What are the company’s core products and features? Prosperi explained:
“M^0 enables any institution to mint a single, fungible cryptodollar called $M with standardized, high-quality collateral. M^0 sets new standards in terms of multi-issuance, distributed collateral storage, decentralized governance, and interoperability. We have built a robust, credibly-neutral, next generation backend for fintech frontends.”
Challenges Faced
What challenges have Prosperi and the team faced in building the company? Prosperi acknowledged:
“Crypto is a nascent industry, continuously trying to find its place in the world. Crypto is also an incredibly aggressive, risk-on, gamble-oriented, capital. M^0 is innovating towards mass market adoption of crypto rails, and not necessarily to boost the ability of crypto to facilitate speculation and high leverage. The recent bull market in crypto, the emergence of projects promising incredibly elevated equity-like returns under the brand of saver solutions, has increased the implicit cost of capital to attract capital. This is definitely a challenge for projects like ours. In order to face that challenge, we try to remain committed to our long term ambition, patient yet aggressive. The amount and quality of capital we raised from our investors has allowed us to do so, but on the other side we should always remind ourselves never to fall into complacency.”
Evolution Of M^0’s Technology
How has the company’s technology evolved since launching? Prosperi noted:
“M^0’s protocol launched recently, and our infrastructure is now live! We’ve successfully deployed the M^0 core protocol and on-chain governance mechanism on the Ethereum Mainnet.”
“The way we ultimately designed the protocol was clearly very different from the way we had imagined it at the beginning. This was the fruit of endless research and iterations. Now that the core protocol has been deployed, we continue to build the technology around it, to allow connectivity of external actors to the infrastructure; we expect to continue iterating this part of the business over the next months and years, as we proceed with more integrations.”
Significant Milestones
What have been some of the company’s most significant milestones? Prosperi cited:
“One of our most significant milestones has been securing substantial funding in the last year. Our seed round raised $22.5 million, led by Pantera Capital, and our Series A of $35 million was led by Bain Capital Crypto, with participation from top-tier investors such as Galaxy, GSR, Wintermute, and others. This level of funding demonstrates strong market confidence in our innovative approach and vision, as well as on us as a team. The amount of funding that the M^0 project has attracted is unprecedented for a stablecoin-related project in our stage of development. Our investors include some of the very best crypto-native investors worldwide, as well as global investment powerhouses and sophisticated strategic players. The access to capital, resources, and mindshare that those partners will provide will be invaluable for M^0 as we scale.”
“The successful deployment of the M^0 core protocol and our on-chain governance mechanism on the Ethereum Mainnet was another obvious one, after almost 18 months of intensive planning, design and development from dozens of project members and entities spread all over the world. I am very proud of our team and the team we are building.”
Funding
When asking Prosperi about the company’s funding details, he revealed:
“Pantera seed round and Bain capital crypto Series A.”
Differentiation From The Competition
What differentiates the company from its competition? Prosperi affirmed:
“It’s different to pinpoint one aspect that differentiates M^0 from the competitors. To start, I believe that the stablecoin space does not currently have projects with similar levels of ambition which are operating at this level of abstraction. I would make an exception for Maker, which in my opinion pioneered the space of decentralized stablecoin design, even if it decided to move in a different direction compared to the one we are embarking on.”
“Rather than developing a vertical for a single product, the M^0 protocol introduces a superior coordination mechanism that democratizes access to the generation and management of programmable, digital cash instruments. If we define platforms as enablers of products that have better unit economics than the platform itself, M^0 is a platform rather than a product. Unlike other systems that merely tokenize real-world bank deposits, M^0 provides a sophisticated method for accessing liquidity on high-quality collateral. This approach allows M^0 to redesign the monetary stack, creating a robust and decentralized system for cryptodollar issuance, governance, and interoperability. We intend to collaborate with an endless amount of projects on both upstream and downstream on money. With upstream, we refer to all the efforts targeted at providing trusted representations of value on-chain, and with downstream those that are instrumental for the distribution of value. While, in the previous phase of crypto (and finance) profits accrued to the middlemen, we want to flip this and share the profits in a way that is more aligned to the efforts and value created. If M^0 is successful, its profit margin will be thin, but its reach will be immense.”
“In my opinion, however, it is execution quality that makes a difference, way beyond the quality of the initial ideas. The M^0 project started with a very ambitious pace, and we want to maintain that pace as we keep developing. As the current CEO of the business, it is my ultimate ambition for the business I lead to make me inadequate and have to step aside to make space for others more able than me.”
Future Company Goals
What are some of the company’s future goals? Prosperi emphasized:
“M^0’s mission is to redesign the monetary stack, democratizing access to the issuance of programmable digital cash instruments.”
“We believe in a future where the vast majority of the money we use daily will exist on public blockchains, and a future where the issuing stack of this money will be completely redesigned away from the convoluted and opaque financial institutions of our days. M^0 wants to play a key part in this transition.”
“From the beginning, M^0 has been committed to creating a fungible, modular, and easily integrable infrastructure, not just another product wrapper. Beyond yield optimization or risk mitigation, we see M^0’s value proposition as the next generation back-end for global financial technology. Our vision involves a revolutionary approach to money generation and intermediation, leveraging the experimentation of DeFi and the standards of institutional finance. This comprehensive rethinking starts from governance and extends all the way to the end users, ensuring a robust and user-centric financial ecosystem.”
Additional Thoughts
Any other topics you would like to discuss? Prosperi concluded:
“Money is useful only when liquid and widely accepted. We don’t believe in a future where every project is running for itself in trying to maximize, temporarily, its own profits. As we mentioned earlier, M^0 is a collaborative effort, intending to empower those who innovate both the upstream and downstream of value. We want to reconnect the financial system, and facilitate the coordination of those projects around common and transparent standards.”
“The M^0 Foundation is open to collaborate: https://www.m0.org/participate.”
