Algorithmic / under-collateralized stablecoin
M^0's assessment for RD-F-069 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
$M is over-collateralized against off-chain T-bills — NOT algorithmic. Peg maintained by Minter arbitrage: if $M < $1, Minters buy on secondary market and redeem collateral; if $M > $1, Minters post collateral and mint more. No algorithmic stabilization mechanism. MINT_RATIO governance parameter (100%–650%) governs max $M per Minter. Undercollateralization triggers onchain penalty accrual. EarnerRateModel sustainability confirmed: earner yield adjusts downward when earner demand exceeds minter-rate inflows, preventing yield insolvency. RISKS warranting yellow: (1) off-chain collateral opacity — T-bills held in Luxembourg SPV (CrossLend GmbH / DEKA Bank); transparency depends on off-chain custodian and SPV auditors, not on-chain verification alone; (2) single-structure dependency — only one fully documented approved collateral structure; Superstate USTB proposed as second but not confirmed approved at assessment date; (3) Minter solvency dependence — if a large Minter defaults on T-bill
Sources #
- URLM0 Research — Expanding Available Collateral Structures For MintersM0 Research collateral structures: one approved structure (CrossLend GmbH SPV + DEKA Bank); Superstate USTB proposed as secondretrieved 2026-05-16
- MixBytes — Modern Stablecoins, How They're Made: M^0MixBytes analysis of M^0: MINT_RATIO 100%-650%, undercollateralization penalty, peg via Minter arbitrage economics (not algorithmic)retrieved 2026-05-16
- M0 Documentation — Collateral SystemM0 collateral system: off-chain T-bills in SPV; Validator multi-sig attestation required for on-chain collateral updates; custodian DEKA Bank; CrossLend GmbH as investment managerretrieved 2026-05-16
- M0 Research — Protocol Basics: Minter Rate, Global Interest Rate IndexM0 Research rate mechanics: EarnerRateModel calibrated so total earners payouts cannot exceed minter-rate inflows; 'safe EarnerRate' conceptretrieved 2026-05-16
Methodology #
Classify whether the protocol is an algorithmic or under-collateralized stablecoin design per curator classification.
See the full factor methodology and distribution across all protocols →