M^0 Foundation MAP (Monetary Adaptation and Policy) Group, Meeting 1

The M^0 Foundation Council recently constituted an informal Monetary Adaptation and Policy Group (the MAP) in order to oversee M^0’s systemic monetary policy levers and provide research and guidance on the economic policies that drive the M^0 system, in accordance with the Foundation’s mandate.

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By regularly assessing economic conditions and feedback from network participants, the MAP will provide guidance to Governance with the aim of improving systemic stability and innovation within the M^0 ecosystem. The MAP intends to meet on a monthly basis prior to each voting epoch in the TTG in order to analyze and decide if any change proposals should be suggested for the following voting epoch.

Below you will find a snapshot of the current period metrics, as well as the go-forward recommendation by the MAP following the October 29th 2024 meeting.

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The MAP is proposing to maintain both the Minter Rate and Mint Ratio unchanged. While the interest rate scenario is rapidly changing and the yield of eligible instruments is lowering, given the recent ramp up in underlying instruments, the MAP believes that Minters have the capacity to sustain a slightly higher Minter Rate than prevailing market conditions. This would allow approved Earners to maintain high earning levels for longer. 

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The MAP is proposing to leave the Mint Ratio unchanged. While the 3% level of over- collateralization can be considered excessively prudent given market conditions and the nature of the eligible collateral, the MAP suggests maintaining a focus on stability as the protocol continues to scale.

The MAP is proposing to amend the Earner Rate to 4.80%, from 5.00%, given that the vast majority of Owed $M float is expected to be earning from the next epoch. Maintaining the Earner Rate equal to the Minter Rate avoids triggering protocol safety mechanisms that would have actually applied a (albeit small) safety buffer to the Earner Rate if this had to be reduced from 5.00% to 4.80% by the protocol to maintain system balance, reducing effectively in a lower Earner Rate for Earners.

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The MAP embodies the M^0 Foundation’s vision for a resilient, responsive financial ecosystem, and therefore remains committed to balancing growth and stability across the entire network. By crafting policy recommendations that favor both innovation and dependability, the MAP commits to fulfilling its role as a steward of M^0’s mission to shape the future of money.

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About M^0 Foundation

The M^0 Foundation focuses on facilitating the protocol's governance and ecosystem development. M^0 Foundation is established and domiciled in Switzerland, and guided by the M^0 Foundation Council.