As part of our Interview Series at StableLab, we’ve been hosting candid, in-depth conversations with the people building and thinking at the edges of DAO design. The goal is simple: to surface insights that challenge assumptions and push coordination forward.
If you missed our first session with Noturhandle, co-founder of Butter, we explored how Conditional Funding Markets could reshape capital allocation in DAOs.
In this second edition, we zoom out from governance mechanics to something even more foundational: money itself.
We sat down with Luca Prosperi, co-founder and CEO of M0, to examine a deceptively simple but essential question:
“What if stablecoins weren’t just payment tools—but the monetary layer for a new financial system?”
Meet Luca Prosperi, Co-Founder of M0
Luca Prosperi brings over 15 years of traditional finance experience, having held positions at Morgan Stanley and Oliver Wyman. He later transitioned into DeFi, actively contributing to MakerDAO (now SkyEcosystem), particularly around real-world asset integration.
In 2023, he co-founded M0, a protocol designed to create a high-trust, collateral-backed monetary layer for crypto, allowing institutions to issue decentralized, interoperable, and fungible cryptodollars. M0 has since raised $35M in a Series A round led by Bain Capital Crypto and launched on Ethereum Mainnet.
Beyond building systems, Luca is an active voice in crypto governance, sharing insights via his Substack, Dirt Roads, and advising at Cherry Ventures.
Designing Money for the Next Financial Era
Luca opened with a provocation: what if we’re thinking about stablecoins all wrong?
They’re often treated as products—optimized for UX and short-term growth. But real money isn’t a product. It’s infrastructure: invisible when it works, catastrophic when it doesn’t.
“Stablecoins shouldn’t be treated as products. They are money—or should at least strive to be.”
This isn’t semantics—it’s structural. Products are marketed and iterated. Money is trusted and governed. A stablecoin chasing traction might work as a tool but will fail as money.
To behave like real money, Luca argues, stablecoins need:
Credible collateral — transparent, predictable, stress-tested
Governance discipline — clear frameworks for risk and transparency
A long-term mindset — credibility over growth hacks
“We’re not building a product,” Luca said. “We’re designing institutional-grade money—closer to a central bank instrument than a speculative asset.”
This philosophy underpins M^0: a decentralized middleware for overcollateralized, fungible, yield-bearing stablecoins. Its architecture separates roles (Minters, Validators, Earners) and is governed by a Two Token Governor (TTG) system aligning incentives with integrity.
In a market crowded with either opaque or over-engineered designs, M^0 aims to be boring, essential, and foundational—money built to last.
On Moneyness, Yield, and Governance
The conversation evolved into a rich dialogue, surfacing some of the most urgent tensions in stablecoin design.
Raph (Governance Lead): What is a stablecoin in your view? What need does M0 aim to meet?
Luca Prosperi (M0 Cofounder): Stablecoins are not just payment products. Money is a debt instrument, not a front-end UX layer. When you see dollars in your bank account, that’s not stored value—it's a loan you've given the bank. Stablecoins should reflect this deeper structure. In DeFi, Maker initially achieved this: you posted ETH and minted DAI, leveraging your assets. That's real money creation. At M0, we want to continue that path by building a wholesale-grade, overcollateralized stablecoin—AMP—designed for institutional integration. AMP is permissionless, transferable, yield-bearing at the base layer, and supports modular extensions for specific compliance needs.
Kaf (Governance Analyst): What's your opinion on algorithmic stablecoins like Ampleforth?
Luca: I haven’t followed Ampleforth closely in recent years, but I’ve written on this before. The hostility toward algorithmic stablecoins is often misplaced. MakerDAO is technically an algorithmic stablecoin. The key distinction is endogenous vs. exogenous collateral. If you’re optimizing capital efficiency with external, real-world collateral—great. But if you’re leveraging your own token (like Luna), you’re building a hyper-reflexive system destined to collapse. Algorithmic mechanisms can improve capital efficiency, but only when properly collateralized.
Raph: As delegates reviewing new stablecoin proposals weekly, what red flags should we look for?
Luca: If it requires active price discovery, it’s not a stablecoin. A true stablecoin is “buy and forget.” If users must constantly assess underlying risk, you're no longer dealing with money—you're speculating. Many so-called stablecoins today are just tokenized hedge fund strategies. And that's fine! But let’s not call them stablecoins. Moneyness comes from being risk-free, boring, and predictable.
Kene (Governance Specialist): Why build a low-yield “money” asset instead of a higher-yielding financial product? Isn’t that more profitable?
Luca: You have to define what “winning” means. If it’s about profit, creating real money is far more profitable long-term. Look at Tether—they make $50B a year. That’s seniorage. People hold dollars for utility, not yield, which subsidizes the issuer. DAI used to be that: decentralized, yield-less money. But when Maker chased yield, it sacrificed moneyness. It’s easier to build an asset manager; it’s much harder to build real money. But the latter is where impact and long-term value reside.
Mel (Governance Researcher): How do you see M0 positioned within the US regulatory landscape, especially with the trend away from CBDCs?
Luca: I’m relieved the US is rejecting CBDCs—they’re dystopian. Nobody wants a state surveillance wallet. Europe, unfortunately, is moving in that direction with MiCA, which is deeply flawed and protectionist. In the US, recent legislative moves favor open, competitive innovation. M0 is designed to thrive in this setting. We're building an infrastructure where multiple collateralized issuers feed into a single wholesale asset—AMP—which can be customized downstream for different compliance environments. DeFi will evolve into a wholesale market, and retail will interact through regulated fintech apps.
Raph: Can you define “moneyness” more precisely? It’s a recurring theme in your writing.
Luca: Moneyness is the “no-questions-asked” property of money. It’s a boundary condition. When people stop asking what backs an asset, and use it simply as money—that’s moneyness. It's not just about risk or liquidity, but about expectations and belief. During the SVB crisis, USDC dropped because Circle was transparent. Tether, ironically, remained stable because no one knew what was inside. Confidence—often irrational—is central to money.
Kene: In places like Nigeria, users stick with USDT out of habit or convenience, despite the risks. How can we improve education?
Luca: In the future, users won't even see the stablecoin. They'll just see a dollar balance in their fintech app. The app will select the safest, most efficient rails behind the scenes. Education will happen at the application layer. Serious fintechs handling large volumes won’t use Tether; they’ll demand safer infrastructure. The end user will be abstracted from the complexity.
Raph: Any final thoughts?
Luca: Governance delegates are critical. In early DAOs, they were liability shields for dev teams. But as ecosystems mature, we need professionalized, independent governance. Code doesn’t eliminate uncertainty. We need human judgment. The future of crypto will depend on the quality of governance we build today. We're not just guessing the future—we're making it.
Our Take
Luca’s perspective brings a key question into focus: Are we designing stablecoins for trust—or just for traction? In an ecosystem still swayed by TVL rankings and short-term yield, the real challenge is building monetary infrastructure that lasts.
We see stablecoins not as financial accessories, but as the backbone of decentralized finance. Their credibility, governance, and design choices will ultimately determine whether crypto becomes a resilient financial layer—or remains structurally fragile.
And the trendlines are clear. USD-pegged stablecoins now account for nearly 1% of the U.S. M2 money supply, with over $220 billion in circulation. What began as a fringe experiment has become essential liquidity—powering payments, lending, remittances, and on-chain commerce worldwide.
Outlier Ventures (2025)
This conversation reaffirmed our belief that the next phase of DeFi won’t be driven by hype—it will be anchored in governance, credibility, and systems that people trust with their capital.
Luca’s message is simple but urgent: If we expect stablecoins to function like money, we need to build them with the same care and standards we apply to real money.
For Those Interested in Diving Deeper
📖 Read:
🎥 Watch:
Coming Up Next
In our next Interview Series session, we turn our attention to a topic every DAO wrestles with: incentives.
We’ll go behind the scenes with two of StableLab’s own technical leads—Christian Ziegler and Johannes Loewe—to unpack the real mechanics behind airdrops, liquid rewards, and grant systems. From Merkle trees and masterchef contracts to Layer 2 deployment strategies and Sybil resistance, we dig into what’s working, what isn’t, and what’s next.
If you’ve ever wondered how incentive programs are actually implemented—and what tradeoffs lie beneath the surface—this session is for you.
Stay tuned.
Share with your friends:
