M0 Foundation MAP (Monetary Adaptation and Policy) Group, March 27, 2025

The M0 Foundation Council and related parties convened this week for another MAP meeting to discuss M0’s systemic monetary policy levers. As such, the MAP is proposing the following changes to the economic policies that govern the M0 system, listed below.

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The MAP is proposing to increase the Mint Ratio from 97.00% to 98.00%. This 1% increase would grant ecosystem Minters more capital efficiency and operational flexibility while not materially affecting M overcollateralization in rising interest rate environments.

Increasing the Mint Ratio would allow Minters on our network to improve capital efficiency as protocol TVL continues to scale, resulting in approx. USD $1m capital savings for every $100m in TVL growth. Minters are also expected to run operations with an additional operating buffer vs. the Mint Ratio to avoid incurring penalties and thus the effective Mint Ratio is likely to fall between the previously established 97.00% and the go-forward 98.00%.

As usual, the MAP conducted a thorough analysis on how the recommended change would impact interest rate risk exposure for Minters and, more broadly, M token solvency. Considering the short-term maturity of the current collateral portfolio within the system (as well as the average YTM), the MAP determined that this increase in the Mint Ratio will have an immaterial effect on interest rate risk exposure.

As the market continues to develop, the MAP will persist in its work to ensure that the economics of the M0 system remain as robust and balanced as possible.

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About M0 Foundation

The M0 Foundation focuses on facilitating the protocol's governance and ecosystem development. M0 Foundation is established and domiciled in Switzerland, and guided by the M0 Foundation Council.