II.I Operation

The M0 Protocol is permissioned through the Two Token Governor (TTG) mechanism.

The primary actors in the protocol are called Minters and Validators (see II.II Governance Controlled Protocol Actors).

Once permissioned by the TTG, Minters and Validators are able to access certain methods in the smart contracts which facilitate the creation, maintenance, and destruction of $M. $M is a standard ERC20 token. The core operating condition of the M0 protocol is to ensure that all M in existence is backed by an equal or greater amount of Eligible Collateral value that is held in an Eligible Custody Solution (see V.II Off-Chain Actors and Components).

In this context, the protocol acts as the enforcer of a set of rules which controls the generation of M, the validation of collateral custody and value, and the assessment of fees when appropriate.