Written by: angelilu, Foresight News
When you ask friends who entered the crypto space what their first on-chain application was, without a doubt, it must be the little fox wallet. This is a plugin wallet with a cute fox head image, backed by Consensys, a company with strong technical prowess in the Ethereum ecosystem.
In 2016, under the leadership of MetaMask founder Aaron Davis, this little fox that swept the blockchain world was born. Now, nine years later, although the community has long been filled with anticipation for MetaMask to issue a native token, MetaMask has taken an unexpected step by first betting on the stablecoin track.
Against the backdrop of the U.S. "GENIUS Act" bringing unprecedented clarity to stablecoin regulation, MetaMask seized the opportunity and announced yesterday (September 15) that its native stablecoin MetaMask USD (abbreviated as mUSD) is officially live.
mUSD's Technical Architecture and Partners
MetaMask first revealed plans to launch a stablecoin in a governance proposal in early August, and in less than a month and a half, the MetaMask stablecoin mUSD has officially launched as of September 15. This rapid release could not have happened without mUSD's partners.
mUSD adopts a tripartite cooperation model for issuance: Bridge, a Stripe subsidiary, acts as the issuer, M0 provides technical support for the on-chain component, and MetaMask is responsible for deeply integrating the stablecoin into its wallet ecosystem.
In this issuance architecture, M0 plays a crucial role. The platform separates stablecoin reserve management from programmability, allowing regulated entities to connect to the platform to hold and manage reserves, while developers use the platform to control how their stablecoins operate: defining who can mint, hold, and transfer, while customizing new revenue streams and loyalty opportunities.
At the end of August this year, M0 announced the completion of a $40 million financing round, bringing its total funding to $100 million. In addition to issuing MetaMask's mUSD, M0 has also participated in the issuance of USDN for RWA blockchain Noble and USD0 for stablecoin protocol Usual. Furthermore, new banking platform KAST and gaming platform operating system Playtron are also using M0 to build their own stablecoins.
So who is the regulated entity actually responsible for issuing mUSD? Without a doubt, it's Bridge. Bridge provides compliant licensing, monitoring, and strict reserve management for mUSD. In October last year, payment giant Stripe acquired Bridge for $1.1 billion. Bridge offers comprehensive support and solutions for enterprises to issue customized stablecoins.
Regarding this mUSD issuance, Bridge co-founder and CEO Zach Abrams stated, "Issuing a custom stablecoin used to take over a year and required complex integrations. With our issuance technology, we've reduced that time to just a few weeks."
mUSD Positioning and On-Chain Ecosystem Layout
mUSD is positioned as a "wallet-native, self-custodial, highly practical" stablecoin. Its biggest difference from traditional stablecoins lies in its seamless integration experience with the wallet. mUSD will play a role in two core scenarios:
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On-chain applications: providing seamless deposits, swaps, transfers, and cross-chain functionality;
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Real world: expected to support usage at millions of Mastercard-accepting merchants worldwide via the MetaMask card by the end of 2025.
MetaMask Product Lead Gal Eldar stated, "mUSD is a key step in bringing the world on-chain. It will help us break through some of the most stubborn barriers in web3, reducing entry friction and costs for users. We're not just bringing people on-chain; we're building reasons for them to never want to leave."
mUSD will initially be deployed on Ethereum and Linea, with Linea being an EVM-compatible layer 2 network developed by Consensys. On Linea, mUSD will play an infrastructure role, integrating into various core DeFi protocols, including lending markets, decentralized exchanges, and custody platforms, providing users with deep liquidity. The official statement also notes that the introduction of mUSD will help drive continuous growth in Linea's TVL and protocol activity.
Stablecoins have always been the backbone of DeFi, but they have always existed outside of wallets. This stablecoin initiative demonstrates Consensys' ambition—not only to build a wallet, but also to create a complete on-chain financial ecosystem.
Moreover, although mUSD has not yet disclosed any yield features, MetaMask previously launched savings and yield features for stablecoin Earn, so perhaps mUSD's yield potential is worth imagining.
Cross-chain ecosystem development is also an important direction for mUSD. Wormhole has confirmed it will serve as an interoperability partner, and will support mUSD's multi-chain expansion in the future, further enhancing its liquidity and application scenarios across different blockchain ecosystems.
mUSD Reserve Mechanism and Data
For stablecoins, reserve composition is crucial. Although MetaMask has not yet specified mUSD's reserves, M0, as the technical support provider, implements an on-chain proof-of-reserves mechanism, allowing users to verify in real time the correspondence between mUSD's issuance and reserve assets.
According to M0's disclosed page, mUSD adopts an over-collateralization model, with collateral value ($24,814,938) exceeding the circulating supply ($24,318,639), resulting in an over-collateralization ratio of about 102%. The system has set aside nearly $500,000 in stability reserves as an additional buffer against market volatility. mUSD's collateral consists entirely of highly liquid, low-risk assets such as U.S. Treasury bonds.
Currently, the MetaMask official website already provides an interface for purchasing and swapping mUSD. Less than 24 hours after mUSD went live, according to Etherscan data, as of the time of writing, mUSD's current circulating supply is 24.36 million tokens, with 179 holders and 1,539 transactions.
Consensys has not yet disclosed the specific business model and revenue sources for mUSD. According to industry practice, stablecoin issuers typically profit from interest income generated by reserve assets, transaction fee sharing, or ecosystem value capture.
Towards a DeFi Super App
MetaMask was once the undisputed leader in the wallet track, setting a record of 30 million monthly active users during the 2021 bull market and the peak in January 2024. However, according to Token Terminal data, its monthly active users in recent months have hovered around 250,000, with market share dropping to 14.8%, falling to third place among similar products.
Meanwhile, looking at DeFi applications during the same period, Uniswap and Aave are evolving from single-function tools to comprehensive platforms: Uniswap is developing into a trading super app with its own wallet, cross-chain standards, and routing logic; Aave has issued its own stablecoin and integrated lending, governance, and credit functions. The market clearly indicates that single-function products are giving way to ecosystem-based super apps.
Against this backdrop, as one of the most iconic wallets in the Ethereum ecosystem, the strategic significance of MetaMask launching mUSD goes far beyond a product update. It is not only a systematic exploration in token economics, but also a key part of Consensys' effort to build a comprehensive DeFi service matrix.
The "little fox" is also transforming from a simple wallet tool into a comprehensive financial services platform. As the Web3 experience matures, MetaMask is no longer content to be just a simple entry point, but aspires to accompany Web3 users throughout their entire on-chain lifecycle as a "super app."
