M^0 Labs - Reconstructing the Monetary Stack

hello hello oh now I can hear myself so good morning everyone um good to see so many familiar and friendly faces here even on a Sunday morning in Brussels with it which I think is like a unconventional way to meet um as we said I I I I I lead strategy and product for mzero we're going to talk a little bit more about mour in a second and the theme of the it's a really fast chat today uh it's about 10 minutes and we're going to talk about reconstructing the monetary stack so unfortunately I won't be able to walk you guys through how to actually reconstruct uh the monetary stack but I'll try to uh take a stab at that I think um I think we're all gathered here today you know because of this theme right stable coins um and uh prior to prior to joining mzero Luca and the team I spent uh eight years at Circle um and I led the the build out of ussc so I I I would like to think I know a think or two about the the term um but I think as with many people yesterday we were talking about SE was opening up with you know some some categorization and classification I'm I'm also not a fan of this term um I think I think there's so much potential for the technology in and around this sector which is still kind of the killer sector in crypto but stable coin as a term you know I think indexes people too much on the idea that there is a coin and you know you know there is an attempt to kind of stabilize its price which is really kind of a you know a minuscule part of um of what this sector could be so let's let's talk about what the sector could be and um and in the spirit of uh of our good philosopher camela Harris um like let's talk about what stable coins can be unburdened by what they have been and I'll I will have one more mention to politics and then I'll stop I promise um but I think I think what really interests um me personally and probably hopefully a lot of other of you guys in the room is is not so much this idea of having a coin that has like price stability like honestly that's a bit boring I think the much more interesting uh topic behind what we do in this sector is how can you have something like the dollar running on the internet I think that's really U more of uh what what this sector can potentially achieve and uh and if you think like that then um then I think um there there's a significantly larger opportunity for disruption and and Innovation um I don't like to we I was talking about this the other day I don't like to rationalize by by analogies but if you think about the early days of the internet and how uh just the media industry and newspapers for example like the first online version of The New York Times was literally like a like a scann version of the print um um newspaper right and uh and that that was like a V1 for how media and newspapers could work on the internet but it was honestly and today looking back quite obviously not the way to disrupt the industry um in in similar ways I think if you want to consider how something like a currency the most popular currency in the world like the dollar could run on the internet um I think it's fair to say that you know we're just in the V1 of of that and and there's a lot more to happen um I I I am a technologist by background so I always look at things from the perspective of um of tech uh layers and and stack um and if you want to think about money again this is my own personal view I I wrote about this but uh but it's definitely not a formal uh classification that is accepted by anybody but the way that I look into money there are several layers and uh in this base layer of money there's Al there's obviously things like you know the belief system that we as a society come around you know the the things that we ascribe value to um you know in the case of the dollar probably situating around uh you know the US government the the the US treasuries and the belief that the us will continue to pay its bills on the top layer you have all the applications for money uh which are the the things that people obviously uh touch a little bit more whether they are businesses or individuals but there's all this stuff in the middle that I call middleware that um that we mostly don't talk about even in these context when we talk about the sector of stable coins we don't touch on a lot of these topics here you know issuance like who issues who should issue like how do you govern all of that what are the right incentives um and how do you transport and settlement things between these layers um if you think about this in the in the traditional Financial uh monetary stack um it's very complicated and very cumbersome and probably based on a lot of solutions that were architected back in the 50s and' 60s and 7s so that's that's where we think there is an opportunity to go beyond this idea of just uh uh coin that has price stability to actually reconstructing the monetary stack for something like the dollar and uh and that's that's the the space that we're trying to work on at m0o um so so what is m0o uh quickly and and we have a team here we're happy to to chat with folks later we won't have time to go into this in much detail but MZ is essentially an infrastructure that powers uh what we think is the first open Federation for for crypto dollar issues so first of all we we like the term crypto dollar more than stable coin um even though I think we we need to meet with with Seb and and kind of agree on what it actually means because I think we have different interpretations for that but uh but we think it's it's a better term because then it doesn't it doesn't mean that you're just building an asset on chain that is anchored to something that already exists we're really trying to reconstruct that part of the stack as I said and uh and think about how you could have the dollar running uh on the internet uh but what what essentially is in a little bit more detail is that um it's essentially a set of onchain protocols with also some offchain uh technology that we built uh that allows uh for entities to become this this role that we call a mentor on the network and so these entities and it can be any business um they can come to the network uh they can enter an agreement with uh with an operator of a special purpose vehicle to essentially pledge uh some particular type of collateral uh to the protocol and chain right now you can think of that collateral as essentially short-term us treasuries it could evolve in the future but right now it's very simple very vanilla that collateral gets stored in a particular type of structure that lives off chain and therefore uh there's another actro that we call a validator that is basically looking through that structure and saying yes there is uh there are assets over there and they comply uh with the criteria for those assets and if you have those proofs uh that those assets exist on chain uh that that Minter entity can essentially mint a fully funable stable coin on chain and what what that allows you to imagine is is really uh again thinking about the previous picture that I had thinking about this base layer for the dollar you know essentially uh short-term us treasuries as the best representation for for a claim on the dollar without without like the need for you know intermediary risk such as um you know commercial Banks and and any other entities in between and connect that directly with the with the money issuer uh that that lives on chain not only that not connect that with one money issuer but connected with the Federation of money issuers because again uh that that's a call to action that we we always like to to do I think we like to we like to say um you know that crypto and blockchain Technology they allow for the financial system to become much better much more effective um potentially decentralized but then what we are doing in the space um is really a little bit of what happened with uh with the Advent of um of Commercial Bank in you know kind of 200 years ago where everybody was kind of printing their own version of money in a non-interoperable way I think um I think today Commercial Banking Works in a Federated model and and our sector does not work in a Federated model and I think I think we ought to change that it's it's about time for us to move to that V2 or V3 even um so that's that's the model that we have um and I'll I'll mention as I said the last political joke here um we we think that um you know I would imagine many of you guys here in the room and and some of the the folks who were here yesterday are involved in one way or the other into Building Products in the in the space building stable coin products um I think a lot of you guys or a lot of those guys here yesterday unfortunately will not succeed at scale uh in fact the majority will probably fail um and not because you're not smart not because um you know you can't Implement what should be implemented but mostly because um money is a network effects product right and I think really um everybody trying to solve this problem for themselves in really silent and non-interoperable ways uh I think I think you know the time has passed for that like we should figure out ways to to become more Allied um and uh and work in in the form of networks and federations and so uh we are we really trying to propose this model which is an Innovative model to the market uh where essentially instead of building an asset in this space And then trying to fight and uh and bribe people for for adoption um you start actually from the use case and walk yourself way U backwards into into an issuance model that is actually democratized and open for for a Federation of entities so we invite everybody who is interested in that um who's interested in issuing a stable coin who perhaps has a use case uh but doesn't quite have the best goto Market strategy or the best um uh interoperable stack to um to come to us and join the Federation and join our movement um if you want to learn more just head over to m.org or find us on on Twitter thank you