Mountain Protocol
About
Mountain Protocol is a Bermuda-regulated digital asset business (license #202302512) that issues USDM, a permissionless ERC-20 yield-bearing stablecoin fully collateralized by short-term US Treasury bills. The protocol serves both KYC-approved institutional primary users (who mint/redeem at $1 via the platform or API) and pseudonymous secondary users who can freely hold, transfer, and compose USDM across DeFi on eight supported blockchains (Ethereum, Polygon, Arbitrum, Optimism, Base, ZKSync Era, Celo, Avalanche). USDM is undergoing an orderly wind-down following Mountain Protocol's acquisition by Anchorage Digital, with the primary market closing on August 22, 2025, after which remaining holders redeem via Uniswap.
Where Does Yield Come From?
Where does the yield come from? The USDM Reserves — a separate pool of money, protected even if Mountain Protocol goes bankrupt — holds only short-term US Treasury bills (bought to mature within 60 days), Treasury ETFs, money-market funds that invest in US Treasuries, and short-term lending deals backed by Treasuries. The Reserves hold more value than the USDM in circulation (an equity cushion absorbs interest-rate shifts), and they sit in segregated accounts at regulated banks, which cuts down on typical bank-deposit and stablecoin risks.
How does yield reach you? Through an automatic daily process built into the USDM smart contract. Every day around 12pm UTC, an authorized oracle (a trusted feed) calls a function that bumps up a hidden number called the rewardMultiplier. That multiplier applies to everyone's share balance in proportion to what they hold. Yield piles up automatically — no staking, no locking up, no extra steps. Hold USDM anywhere and you still earn.
What about DeFi apps that can't handle a changing token balance? A wrapped version called wUSDM (it follows the ERC-4626 standard) keeps a fixed token amount while the yield collects inside the vault. Protocols can integrate without dealing with the rebasing logic, and you still get the same yield underneath.
Fees: Mountain Protocol charges zero fees for minting, redeeming, or transferring. You only pay the regular gas cost.
What changed with the wind-down? After the acquisition by Anchorage Digital, yield continued for 30 more days (Phase 1, until roughly mid-June). Then it went to 0% (Phase 2). From Phase 3 (August 22, 2025 onward), the reserves move into a Uniswap pool of wUSDM and USDC. At that point USDM is no longer backed by Treasury bills — its backing is whatever USDC sits in that pool.
Persons
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
OpenZeppelin31-05-2023 - 02-06-2023 |
| The audit identified one medium-severity issue which was resolved, and the remaining findings were predominantly low-severity or informational in nature, with most fixed before final deployment. However, the system's security model relies heavily on centralized privileged roles managed by the Mountain Protocol team, which remains a key trust assumption for users. |
OpenZeppelin06-10-2023 - 10-10-2023 |
| The audit found zero security vulnerabilities in wUSDM, with only four informational notes all resolved during the engagement, confirming a clean security posture for the token contract. The codebase was deemed simple, efficient, and well-integrated with the previously audited USDM contract. |
Backers
Mountain Protocol's investor backers, as displayed on both the homepage and company page, include: Multicoin Capital, Castle Island Ventures, Coinbase Ventures, Bankless Ventures, and New Form. No specific round names (e.g., Seed, Series A), investment amounts, or dates were disclosed on the official website. The protocol was launched in 2023 and was acquired by Anchorage Digital in May 2025 (with the definitive agreement signed May 12, 2025).
Legal
Legal form
Limited company (Mountain Protocol Limited)
Registration jurisdiction
Bermuda (regulated by the Bermuda Monetary Authority, BMA license #202302512, governed by the Digital Asset Business Act 2018 and PIPA)
Status and notes
The operating entity is Mountain Protocol Limited, a Bermuda company, which issues the USDM token and operates the Platform. The USDM Reserves are held by a legally separate Bermuda orphan SPV (USDM Reserves Ltd, a charitable trust held by Carey Olsen Fiduciaries Bermuda Limited) to ensure client assets are segregated and bankruptcy-remote. Terms of Use, Privacy Policy, and U.S. Restrictions are published at docs.mountainprotocol.com/legal/. The company complies with the Bermuda Monetary Authority's Digital Asset Business – Single Currency Pegged Stablecoins (SCPS) Guidance. The DPO is Erika Gonzalez ([email protected]). The protocol was acquired by Anchorage Digital in May 2025 and is winding down USDM by August 22, 2025.