The Reserve
In Mento V3, most Mento stablecoins are CDP-backed (using Liquity v2–style CDPs). This page focuses on the Reserve-backed assets documented in these V3 docs: USDm and EURm. It explains why that split exists and how the Reserve works for those two stables.
Two backing models in V3
Reserve-backed
USDm, EURm
The Reserve holds high-quality fiat-backed collateral (e.g. USDC, USDT, USDS for USDm; EUROC for EURm). These stables can be backed 1:1 by such assets because they have liquid, high-quality counterparts that can be integrated onchain.
CDP-backed
GBPm and others
No equivalent high-quality fiat-backed GBP (or other currency) stablecoin is integrated at scale yet. So these stables are minted via Liquity v2–style CDPs: users deposit USDm as collateral and borrow the synthetic stable (e.g. GBPm). When high-quality fiat-backed counterparts become available, governance can consider moving to Reserve-backed backing for them too.
So, in the backing model documented here, the Reserve backs USDm and EURm. Other Mento stables are treated as synthetic and backed by CDPs (with USDm as collateral in the current design), until the ecosystem has suitable fiat-backed collateral to integrate.
Why USDm and EURm are the documented Reserve-backed assets
USDm and EURm have high-quality, fiat-backed counterparts that are already integrated and liquid on the chains where Mento deploys:
USD: USDC, USDT, USDS, and (on some chains) others trade at or near USD parity and are widely used. The Reserve can hold these and back USDm 1:1.
EUR: EUROC (and e.g. axlEUROC on Celo) provides a regulated euro-backed stablecoin. The Reserve can hold it and back EURm 1:1.
For GBP (and some other currencies), there is currently no integrated, high-quality fiat-backed stablecoin at the same level of adoption and trust. So 1:1 Reserve backing with a single GBP collateral type is not feasible yet. CDPs allow those stables to exist anyway: users lock USDm (which is itself Reserve-backed) and mint e.g. GBPm. Once high-quality fiat-backed GBP (or other currency) counterparts are available and can be integrated, the protocol can consider Reserve-backed backing for those stables too.
What the Reserve does (USDm and EURm)
For USDm and EURm, the Reserve:
Holds collateral — Holds the fiat-backed assets (USDC, USDT, USDS for USDm; EUROC etc. for EURm) that back the circulating supply.
Enables rebalancing — The Reserve liquidity strategy is allowlisted on the FPMM pools that pair USDm or EURm with those external stables. When a pool becomes imbalanced, the strategy can mint or burn the Mento stable and move collateral so the pool rebalances at the oracle rate (within configured incentives and caps).
Operates transparently — Holdings and operations are onchain and verifiable.
The Reserve does not hold collateral for CDP-backed stables like GBPm; those are backed by user-deposited USDm in the Liquity v2 system.
Reserve dashboard: reserve.mento.org
The Reserve dashboard at reserve.mento.org is the public view of the Mento Reserve. It shows:
Total stablecoin supply — Combined supply of all Mento stables (USDm, EURm, GBPm, and others).
Reserve holdings — The total value of collateral held in the Reserve (the diversified portfolio backing USDm and EURm).
Collateralization ratio — Reserve holdings divided by the supply of Reserve-backed stables; a ratio above 1 indicates over-collateralization.
Supply by stablecoin — Circulating supply per Mento stable (USDm, EURm, GBPm, etc.).
Use it to check Reserve health, verify backing, and see how supply and collateral evolve over time.
Governance and risk
Reserve composition, which assets are accepted as collateral, and the parameters for the Reserve liquidity strategy are set by governance (MENTO token holders). Over-collateralization and risk management apply to the Reserve's backing of USDm and EURm; the goal is to keep those stables robustly backed while allowing efficient rebalancing and earning protocol revenue via yield income.
Next steps
FPMMs — How pools use the oracle rate and rebalance.
Rebalancing & strategies — Reserve liquidity strategy and other allowlisted strategies.
Protocol Economics — Value flows, fees, incentives, and reserve management.
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