Solana
Mountain Protocol raises $8M to bring USDM stablecoin to Solana and real-world businesses – DL News
- Mountain Protocol raises $8 million in round led by Multicoin Capital.
- This is the latest trend of stablecoin issuers trying to attract customers by sharing the yield of Treasury bills.
Mountain Protocol raised $8 million in a funding round led by Multicoin Capital.
The company is part of a wave of stablecoin issuers — like Paxos and Angle — that are taking on the turf of large issuers by sharing the yield of U.S. Treasuries with their customers.
“Today, Circle and Tether keep all of that,” said Martin Carrica, co-founder of Mountain. DL News, referring to the 5% yield on U.S. Treasury bonds. “Our thesis is: Let’s give this back to the holder.”
The market becomes crowded. PayPal, Ripple, Aave, Curve, And Ethena are just some of the organizations that have announced or launched stablecoins in the past year.
No wonder: last year Bernstein predicted that the $161 billion the market would reach nearly $3 trillion by 2028.
Share the yield
Amid high interest rates, stablecoins backed by US Treasuries have become a cash cow for issuers.
On Wednesday, the yield on three-, six- and 12-month U.S. Treasuries was barely above 5%.
Mountain’s USDM and similar stablecoins attempt to attract users by sharing the yield they earn on U.S. Treasuries.
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Carrica compared USDM to a high-yield savings account.
However, breaking the dominance of Tether and Circle – which have a combined market value approaching $150 billion and unrivaled liquidity, a feature that appeals to high-volume traders – is a challenge.
After Coinbase Ventures and Castle Island backed Mountain’s $4 million seed round in September, Mountain struggled to maintain its initial momentum.
Mountain Protocol’s market size reached $154 million in March.
While Ethereum’s Manta layer 2 blockchain using USDM in a rewards campaign fueled the stablecoin’s growth to reach a total value of $154 million in March, it has since fallen to $49 million.
“It seems sketchy”
Mountain, registered in Bermuda, will not offer its USDM to US users until the country passes stablecoin legislation – which is unlikely to happen in 2024 due to the election and political wrangling at the Capitol.
This poses a barrier when negotiating partnerships or agreements with suppliers, Carrica said.
“They say to me, ‘Okay, why don’t you work in the United States?’ It seems sketchy,” he said. “This is less a simple question of regulation and more a question of perception.”
Carrica said Mountain’s real opportunity is not in the United States, but in cross-border payments and countries with unstable currencies, like his native Argentina.
The company will use the new liquidity infusion to boost hiring and bring USDM to 15 additional blockchains, including Solana and Cosmos.
As of Wednesday, USDM could be issued and redeemed on Ethereum, Polygon and a trio of layer 2 blockchains: Arbitrum. Optimism and base.
Mountain also plans to make it easier to exchange USDM for other stablecoins on an individual basis and to allow businesses to use USDM.
Aleks Gilbert is a DeFi correspondent at DL News. Do you have any advice? Send him an email to aleks@dlnews.com.