In this edition, we’re giving you the basics and latest intel on Mountain Protocol, a platform issuing the $USDM stablecoin.
Learn about the latest protocol news, $USDM’s unique rebase model, and the role stablecoins at large may play in the global economy…
Over and out ⬇
Background on Mountain Protocol
Mountain Protocol consists of 2 primary products:
$USDM, the protocol’s USD stablecoin.
The stablecoin is fully backed by the ‘USDM Reserves’, which consist of US Treasuries.
Reserves are held in custody accounts that are bankruptcy-remote, thus the backing assets are excluded should the operating company face issues involving insolvency.
Interest garnered from the treasuries is paid out via daily rebase rewards for $USDM holders. The previous day’s rebase reflects a 5% APY.
Launching earlier this month, the stablecoin has a marketcap of ~$3.7M, showing some demand from DeFi users.
Mountain Protocol Platform, which allows purchases and redemptions of $USDM for $USDC.
Fiat integration for purchases and redemptions is planned.
Today a partnership between Wintermute and Mountain Protocol was announced, aiming to enable 24/7 redemptions from $USDM for $USDC
Mountain Protocol emphasizes four key pillars for yield-generating stablecoins: permissionless integration, adherence to regulations, enterprise-level infrastructure, and a smooth UX.
Why Mountain Could be Interesting
Mountain Protocol presents a unique proposition in the stablecoin market by offering a yield-bearing, fully backed ERC20 token, aimed at challenging non-yielding fiat-backed stablecoins like $USDC and $USDT.
Operating from Bermuda frees the company from the complexities and constraints of U.S. regulations, providing a potentially more flexible environment for innovation.
What sets it apart is its daily rebasing feature, which offers users rewards generated from U.S. Treasury interest.
Its focus on meeting enterprise-level standards while ensuring regulatory compliance in its jurisdiction is also something to value.
The project’s notable investors include the likes of Coinbase Ventures, OpenZeppelin, Nansen, and more, with Nic Carter of Castle Island Ventures leading the funding round.
Future & Evolution of Stablecoins
Mountain Protocol Founder Martin Carrica believes that stablecoins are more accessible and efficient compared to traditional banking systems.
He has mentioned that the U.S. is a challenging place to explain BTC due to its stable financial and governmental systems, contrasted with countries like Argentina where stablecoins can offer more immediate benefits.
Martin, a native of the country, says that the rise of stablecoins in Argentina is due to their advantages over traditional banking, including better custody solutions, and international payment capabilities.
The U.S. is attempting to regulate stablecoins as banks. Martin has observed that countries outside the U.S., particularly emerging markets, are more open to stablecoins and see them as beneficial.
Martin foresees growth in stablecoins because they represent a better version of the dollar.
With stablecoins, even average consumers can access dollar interest-bearing accounts, which were previously available mostly to large corporates.
Nic Carter, a significant backer behind Mountain Protocol, believes that it's crucial to understand why stablecoins are valuable before considering their potential benefits to U.S. interests.
He draws a comparison between stablecoins and Eurodollars, emphasizing the historical context of Eurodollars.
Eurodollars emerged as a solution for countries like Russia to settle dollar transactions without relying on the traditional U.S. banking system.
He points out that Eurodollars were created in foreign banks, such as in France or the UK, to transact in dollars while avoiding potential asset seizures by the U.S.
He highlights that stablecoins were similarly created as a solution, with Bitfinex's banking challenges being a notable catalyst.
His prediction is that stablecoins will continue to grow, especially outside the U.S.
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