Experts are saying that Plasma could be the next big thing for digital payments. The stablecoin-centric blockchain’s mainnet went live on September 25, 2025, and launched its native token XPL on the same day, listing on several cryptocurrency exchanges.
Simultaneously, the blockchain also saw US$2 billion in deposits locked on day one, with this number jumping to US$7 billion the next day. For comparison, Coinbase’s Base chain has US$5.1 billion in deposits locked.
Previously, Plasma had drawn hype for positioning itself as a “purpose-built blockchain for stablecoins,” raising US$24 million last year from Framework Ventures, Bitfinex, Peter Thiel’s Founders Fund, and Tether CEO Paolo Ardoino.
Where Plasma Fits Into Today’s Stablecoin Wars
A number of players are issuing new stablecoins in bids to become the dominant currency for cross-border transfers and payments.
PayPal launched its stablecoin PYUSD last year to much fanfare, while Binance moved to back First Digital’s FDUSD in 2023, encouraging users to use FDUSD trading pairs through a zero-fee campaign.
Why?
The business of stablecoins is incredibly profitable as issuers back USD-denominated tokens with interest-yielding assets such as U.S. Treasury bonds and money market funds.
Tether’s stablecoin USDT generated US$5.2 billion in interest in 2024. This number is expected to reach US$15 billion by the end of 2025, which explains its whopping valuation of $500 billion.
Stablecoins such as USDT can be transferred through multiple blockchains, including Ethereum, BNB Chain, Solana, etc. Plasma seeks to be the go-to blockchain for stablecoins, boasting a processing speed of 1,000 transactions per second and offering zero transfer fees to entice users.
For comparison, Ethereum averages just 19 transactions per second, and many have criticized the chain for high gas fees and long wait times during times of peak demand.
How Plasma Actually Works
Imagine Plasma as the “subway system” of blockchain, running the city’s underground system safely and efficiently. It is the “child chain” for Ethereum and tackles one of the network’s biggest challenges: scalability.
Moreover, Plasma’s consensus mechanism, PlasmaBFT, based on the Fast HotStuff algorithm, ensures rapid transaction finality under a Byzantine Fault Tolerant framework.
Here’s how it processes transactions better and faster than Ethereum:
- Consensus Type: Plasma uses a BFT-based protocol called PlasmaBFT inspired by Fast HotStuff, which provides deterministic finality within seconds. Ethereum uses a variant of Casper, which offers probabilistic finality that can take several minutes.
- Finality and Latency: PlasmaBFT finalizes blocks almost instantly, whereas Ethereum’s consensus finalizes blocks in roughly 12-60 seconds with a delay before blocks are considered irreversible.
- Throughput: Plasma’s BFT design is optimized for thousands of transactions per second with pipelined consensus rounds, specialized for stablecoin transactions. Ethereum balances general-purpose smart contract computing with hundreds to thousands of transactions per second on Layer 1 but with slower finality.
- Fault Tolerance and Validator Requirements: Plasma tolerates up to 33% faulty or malicious validators and uses Proof of Stake with slashing for malicious behavior, but no penalty for temporary offline validators. Ethereum’s validator set is much larger and globally distributed, with more complex staking and penalty rules.
- Layer Focus: Plasma is a dedicated Layer 1 chain optimized specifically for stablecoin payments and fast transfers, anchored periodically to Bitcoin for external security. Ethereum is a general-purpose Layer 1 blockchain supporting diverse dApps, tokens, and smart contracts.
- Overall, Plasma’s BFT consensus offers faster, more predictable finality and higher throughput for payment transactions compared to Ethereum’s more versatile but comparatively slower consensus mechanism optimized for broad decentralized applications.
XPL and Plasma
If Plasma provides the rails for payments, XPL acts as the engine that drives its value. XPL is the native token of the Plasma blockchain. Originally priced at $500 million during its ICO, XPL has grown to a $8.6 billion valuation, reflecting a 17x increase in valuation.
As the backbone of the Plasma mainnet bet, it supports deployments, management, and instant settlements with high throughput, minimal fees, and stablecoin optimizations. XPL powers the network’s proof-of-stake system to reward validators in XPL to process transactions.
The distribution of XPL is designed to balance the supply of XPL and the ownership on the Plasma mainnet beta. It has a fixed total supply of 10 billion tokens, working as a gas token, staking asset, and reward token for transactions and contract execution.
Here’s how it’s broken down:
- Public Sale – 10% (1.0 billion XPL)
- Distributed to community members through Plasma’s public sale and deposit campaign and sold to early adopters via the Echo launch platform
- Distributed to community members through Plasma’s public sale and deposit campaign and sold to early adopters via the Echo launch platform
- Ecosystem & Growth – 40% (4.0 billion XPL)
- Reserved to expand the Plasma ecosystem through liquidity rewards, DeFi and fintech collaborations, and adoption initiatives
- Team – 25% (2.5 billion XPL)
- Reserved for the core team and future members, offering long-term rewards to attract and retain talent
- Investors – 25% (2.5 billion XPL)
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- Designated for private investors and early backers, including Bitfinex, Founders Fund, and other seed and Series A participants
What’s Next For Plasma?
September 25, 2025: Plasma Mainnet Beta and XPL Token Launched
2025 Launch and Adoption
- Roll out initial products and features
- Build ecosystem: Work closely with over 100 DeFi and fintech partners to ensure liquidity pools, lending markets, and payment channels
- Target unstable currency markets: Turkey, Argentina, and parts of Africa are target markets
2026 Decentralization and Expansion
- Encourage open staking from limited trusted validator sets to approve external validators
- Distribute consensus power via community-run nodes to scale up the network’s decentralization and global reach
- Release additional features; new pBTC Bitcoin bridge will connect Bitcoin liquidity to the Plasma ecosystem to launch BTC on Plasma
- Add more major stablecoins and region-specific tokens to reduce risk and attract global users
How Does Plasma Plan to Compete with Other Blockchains?
Plasma, which markets itself as the first blockchain that is customized for stablecoins, plans to expand consumer adoption and approach real-life market activities.
For example, Plasma’s team has introduced Plasma One, a consumer app designed to make stablecoins more accessible for everyday use, as well as encourage the processing of payments on Plasma chain.
Plasma One addresses the demand for stablecoins like USDT in deposits or cross-border trades. In short, it acts as a neobank or fintech bank that enables online saving, spending, earning, and spending permissionlessly through the currencies they trust.
Plasma’s Got a Long Way to Go
On September 26, 2025, Plasma reached over $7 billion in total value locked (TVL).
To be considered a key blockchain, Plasma’s TVL needs to reach the tens of billions of dollars range to compete with major blockchains like Ethereum and Solana, which boast US$84.6 billion TVL and US$11 billion TVL, respectively.
That being said, given that its mainnet has only been live for a month, it is already showing signs of progress.
Trade XPL on BTSE.
