M^ZERO, a decentralized infrastructure layer for digital asset value transfer, has emerged from stealth mode with a bullish $22.5 million seed round, and the intention of advancing the pioneering work done in decentralized finance (DeFi).

The M^ZERO platform, helmed by players with backgrounds in both traditional finance and decentralized communities such as MakerDAO, will be taking an institutional-grade approach to DeFi.

The seed round was led by Pantera Capital, with participation from Road Capital, AirTree, Standard Crypto, The SALT Fund (part of the SkyBridge/Anthony Scaramucci family), ParaFi Capital, Distributed Capital, Kraynos Capital, Earlybird, and Mouro Capital (the venture capital arm connected to the Santander Group).

In the wake of last year’s collapses and bankruptcies of “centralized finance” firms, DeFi is steadily evolving to become more institutional-friendly and scalable. Luca Prosperi, CEO of M^ZERO Labs, said the protocol aims to do for institutional value transmission what others in the past have done to create a neutral infrastructure for payments to flow.

“You can think about M^ZERO as an infrastructural overlay on Ethereum, where large providers of assets and liquidity around the world can exchange value, and builders can create solutions,” Prosperi said in an interview. “Virtuous governance will be crucial for this, and we are developing the rules and code for this to be as decentralized as possible from day zero.”

Prosperi, who was one of the leading voices within the MakerDAO community, said M^ZERO will probably have a governance token, but its initial distribution could target large and sophisticated institutions rather than the general public. The infrastructure will have an open architecture, potentially acting as a connector to some existing DeFi platforms, he said.

“We are researching the development of a decentralized protocol, but the decentralized governance that we have in mind will be significantly different from the model based on airdrops, open Discord channels or forums, and anonymous participation,” he said. “You could think about it as a consortium of sophisticated parties rather than a [decentralized autonomous organization] in that sense.”

In addition to Prosperi, M^ZERO's founding team includes MakerDAO's former head of business development Greg Di Prisco and Oliver Schimek, previously CEO at fintech company CrossLend.

In terms of a timeline, the M^ZERO platform aims to go live by the end of this year.

“What Visa, Mastercard and American Express have done for payments, M^ZERO wants to do to value distribution,” said Paul Veradittakit, Managing Partner at Pantera Capital in a statement. “It will be an open-source, credibly neutral protocol where providers of liquidity and collateral can freely meet in a decentralized market on blockchain rails.”