Overview

What is Wrapped M (wM)?

Wrapped M (wM) is a non-rebasing ERC-20 wrapper for the rebasing and immutable M token. It maintains yield-earning capabilities while providing compatibility with DeFi protocols that require standard ERC-20 tokens.

While the native M token automatically increases balances as yield accrues, Wrapped M maintains static balances where yield can be explicitly claimed. This makes Wrapped M compatible with protocols that aren't designed to handle rebasing tokens, dramatically expanding the utility of M in the broader DeFi ecosystem.

Why Wrapped M?

Every $M extension eventually wants to connect to certain utilities such as DeFi protocols, on/off ramps, etc. In order to concentrate liquidity, that utility should always exist in the form of M0's stablecoin building block: $M.

However, rebasing tokens like $M automatically change their balances as yield accrues, which creates challenges for many DeFi protocols that expect static token balances. Wrapped M solves this by:

1. Maintaining fixed token balances that don't automatically increase
2. Separately tracking and allowing manual claiming of accrued yield
3. Preserving the full economic benefits of M while improving protocol compatibility
4. Enabling protocol-specific administration of earning capabilities

Key Features

• DeFi Compatibility: Works with lending platforms, AMMs, and other protocols that require standard ERC-20 behavior

• Yield Preservation: Maintains yield-earning capabilities of the underlying M token

• Value & Solvency: wM aims for a direct value link to M for earners. The target value for an earning token is its underlying M principal plus accrued yield:

  $$1 \text{ }\text{earning }\text{wM} + \text{wM yield } ≈ 1 \text{ }\text{M} + \text{Accrued Yield}$$

  Critically, the entire system maintains a solvency invariant, ensuring it's always fully backed. The total M held by the wM contract is always greater than or equal to the total wM supply plus all accrued yield owed to earners:

  $$\text{M Balance}_{(\text{wM contract})} \ge \underbrace{\text{totalNonEarningSupply} + \text{projectedEarningSupply}}_{\text{Total wM Liabilities, aka wM supply + accrued yield}}$$

  This guarantee is maintained through the system's design, where yield earned on M held for non-earning wM holders, along with minor positive rounding effects during transfers, accumulates as "excess" reserves within the contract.

• Flexible Yield Options: Configurable claiming and recipient mechanisms

• Delegated Administration: Trusted admins can manage earner status without governance

• Protocol Value Capture: System design naturally accumulates excess reserves that benefit the broader protocol ecosystem

Comparison to $M token