Dialogue with Plasma CEO: How to reconstruct the stablecoin value chain behind the airdrop craze

Guest: Paul Faecks, CEO of Plasma; Host: Andy; Robbie; Podcast Source: The Rollup

Summary of key points

The day after the release of the Plasma mainnet and XPL tokens, The Rollup spoke with Plasma CEO Paul Faecks to discuss the following:

• Airdrop and XPL allocation strategies

• 280 million Binance users receive on-chain revenue

• XPL Token Vision

• Plasma One: New banking services for unbanked people

• Compete with Visa on a market capitalization of over $50 billion

• Why “scale” will be different in five years

• The dominance of Tether Partnership and USDT

Wonderful view summary

• The most important thing in decision-making on token allocation and distribution is to enter the market in an open way so that more people can participate.If you invest $1 on the chain, you may get a return of $10,000, which is actually consistent with our consistent operating philosophy.

• Before the main network was launched, Plasma had reached an important profit cooperation with Binance.Through this collaboration, users can deposit money directly on Plasma on Aave on Binance’s platform.

• The native user group that relies solely on the encryption field is not a sustainable model. It needs to promote real organic use. It cannot rely solely on incentive mechanisms to attract users, but rather to ensure that the platform itself is attractive and can meet the real needs of users.

• Plasma has always hoped that this will eventually become a community-driven project.Paul Faecks believes that the decisions made in the distribution and distribution of tokens are basically based on this concept, aiming to make the entire ecosystem closer to the needs of the community.

• Stablecoins are at the beginning of an industry turning point.The total amount of stablecoins circulating in the market is about US$260 billion to US$270 billion, and Plasma believes that this market will eventually reach the trillion level.

• Paul Faecks believes that there will be exclusive stablecoin chains in the future, with the total amount of stablecoins on these chains reaching hundreds of billions of dollars, and the daily transaction size may reach trillions of dollars.

• Stablecoins have become the core strategic tool of global dollar monetary policy because they can attract buyers who have no preference restrictions on debt prices.

• The entire XPL system is designed closely with the interests of the community, while ensuring that XPL tokens play a central role in the ecosystem.

• Plasma’s vision is very clear: global commerce will gradually shift to stablecoins, and Plasma will become an important driving force for this transformation.

• When building Plasma, it always revolves around the USDT ecosystem.While Plasma supports a world of multiple stablecoins, Tether’s market dominance and extensive distribution network are very difficult to replicate

Reflections after XPL release

Andy: Paul, let’s talk to us about the past few days, how do you feel?

Paul: This is really very nervous.We were busy all week because starting a blockchain is not just about opening a network.There are many dynamic factors involved here, including some external variables, which are not completely controlled by us.So, it was really a stressful week.But so far, everything has been going well and we are very happy.However, everyone was really exhausted last night.

Robbie: So what is the hardest part you find?Now it seems that the most difficult stage has passed?

Paul: Not at all.I think the real challenge is still ahead.We just announced the Plasma One product, and that’s obviously just part of the work before launching the chain.I think this is actually the starting point for us to really start building our vision.Although the chain itself, the DeFi ecosystem and the exchange components are very important, there is still a lot of work waiting for us to complete.

Andy: Now, we want to understand your future vision, such as how you plan the development of your product line and how you view the future development direction of the chain.Obviously, Plasma has attracted a lot of activity and attention due to the design of the pre-store mechanism.Before delving into the future, I have a question to ask:Why do you decide to use the mechanism of pre-depositing USDT to get the XPL token airdrop?For example, assigning to users who deposit early, this design has sparked a craze on the Internet.Some even said that if you put $1 on the chain, you might get a return of $10,000.

Of course, not everyone can operate according to this ratio, but many users do benefit from it.I think you have successfully avoided some of the negative public opinion that similar mechanisms can usually cause.How did you do this?Why choose this way to reward the Plasma community and Plasma Collective?What is the logic behind this design?

Paul: I think this is very consistent with our usual operational methods.For example, we set very clear and transparent parameters when selling publicly, and anyone can participate.This is very important for us because we want to enter the market in an open way so that more people can participate.In addition, Nathan is responsible for the collective work of stablecoins.He performed very well in this regard and achieved remarkable results.

At the same time, I thinkWe have always wanted to build this project into a large-scale community-driven collaboration.Especially for stablecoins, we hope that users will not only be willing to use it, but also truly like it.Only by starting from grassroots users can stablecoins truly play a role and reflect their value.I think the decisions we make in terms of token distribution and distribution are basically based on this concept, aiming to make the entire ecosystem closer to the needs of the community.

Revenue Sustainability on Plasma

Andy: Let’s talk about some of the current trends on the chain.For example, Aave and Ethena provide very attractive benefits on USDE, as well as loop operations and XPL reward mechanisms.These have attracted many users.So,What is the best way to get profits on Plasma now?How is the entire ecosystem running?How do you view the sustainability of the earnings model associated with XPL token rewards?How do you hope to transform this revenue model into a mechanism that attracts long-term community participants, rather than a simple “farm and sell-off” phenomenon?Can you talk about your strategies and vision in detail?

Paul: Of course, this is a very good question.I think there are indeed many examples that although the TVL (total locked volume) of some projects is very high, due to the lack of practical application scenarios, substantial progress was ultimately failed.We are very clear about this complexity.For us, we always believe thatDistribution is the key to ensuring network value.As a stablecoin network, you need to join as many nodes as possible to increase the value of the entire network.

One point that may be overlooked is that we had reached an important profit cooperation with Binance before the mainnet went live.Through this collaboration, users can deposit money directly on Plasma on Aave on Binance’s platform.You know, Binance has 280 million users, which is a huge breakthrough for us.Therefore, our overall goal is to achieve larger token allocation through such cooperation, so that the on-chain money market can be used by any user who sees its value.

certainly,Relying solely on native user groups in the field of encryption is not a sustainable model.Such user groups are usually short-term and have high market volatility.Therefore, our strategy cannot revolve around these users, but needs to be expanded to a wider audience.

Going back to your question about Plasma DeFi sustainability, I think one key point is that we needPromote true organic use.The so-called “organic use” refers to users using our platform based on actual needs rather than simply reward mechanisms..That is, weWe cannot rely solely on incentive mechanisms to attract users, but we must ensure that the platform itself is attractive and can meet the real needs of users..At this point, I think we have made some progress and will continue to focus on this direction in the future.

Copy Plasma’s success

Robbie: Your team does have a unique advantage.Generally speaking, blockchain projects will launch their own tokens after the main network is online and begin planning the ecosystem to attract liquidity through tokens.But you have achieved these goals before the token was launched.This made me curious, what is special about you that other teams cannot have?

Paul: We have the best team.

Robbie: Do you think other teams will try to replicate your practice, but they may not end up succeeding because they cannot form a team like you.?

Paul: Yes, I hope so.But if they don’t do that, I might need to have some specific communication with them.But, at the end of the day, I really believe we have a very good team.I sincerely believe that such a smart and long-term goal team is our greatest advantage.They are not only capable, but they are also truly committed to creating something valuable, and this is the most valuable asset of any company.

Stablecoins are the turning point in the industry

Andy: I ​​talked to Jeremy Elair last week about how other teams are involved in this field.He shared Circle’s perception of Arc and their chains, as well as Broads’ USDC distribution strategy.There are now some other competitors, such as Stripe, Circle and Tether, who are all trying to build a global stablecoin transfer network.

When it comes to competitors, we often think of large payment processing companies like Visa.These companies have a market capitalization of over $50 billion and deals are processed in trillions of transactions per day.I talked to Jeremy about this topic, and he believes that USDC’s goal is to be everywhere like Netflix, whether it is a smart TV, a smartphone or a smart refrigerator, you can see USDC.

I think Paul’s philosophy is similar, and he has already implemented it very successfully worldwide.When it comes to Arc and chains, he sees them as a natural evolution of Web 2.0 technology.For example, you can use Google Chrome on your Apple computer, streaming services on your Apple TV or iPad, and you can also play shows on LG or Samsung TVs, or even use Apple products on your Google Chromebook.This fusion of technology stacks is the focus of our discussion.He pays great attention to the concept of “expanding the cake” rather than competing for existing market share.Therefore, I would like to ask you a question.

In the competitive landscape of stablecoin chains, especially Plasma, as a leader and market start-up project in this field, what do you think of your advantages?Under the concept of “expanding the cake”, what major contributions do you think Plasma can bring to the industry?

Paul: I think stablecoins are at the beginning of an industry turning point.Currently, the total amount of stablecoins circulating in the market is about US$260 billion to US$270 billion, and we believe that this market will eventually reach the trillion level..Many people predict that the growth of stablecoins will be far beyond that, which also makes us look forward to the future.

Looking back at our development, the problem we faced initially was not how to compete with payment giants like Stripe, but whether everything we did actually make sense.Why do stablecoins need an exclusive chain?Why can’t you use Ethereum directly?As time goes by, the market demand for stablecoin chains has gradually emerged, which makes me feel relieved because it reflects the real demand of the industry.

Now, we do form a competitive relationship with payment giants like Stripe.But our goals and strategies are different from them.For example, we don’t compete directly with Temple.We believe that winning the industry’s “massive” battle is the key.No projects have achieved real victory in this area, including Ethereum and Tron.I believeThe definition of “massive” will change in the next two to five years.I believe that there will be exclusive stablecoin chains in the future. The total number of stablecoins on these chains will reach hundreds of billions of dollars, and the daily transaction scale may reach trillions of dollars..This is the future we strive to build.Therefore, we won’t pay too much attention to small-scale competition, such as the dynamics of Temple or Codex.Although I respect these teams very much and they are pursuing their goals, our direction is even bigger.

The impact of stablecoin saturation market

Robbie: Another noteworthy change is the market’s acceptance of stablecoins.There is now a consensus that the circulation of stablecoins will reach trillions.This is not only the result of market development, but also part of the U.S. government financing.Stablecoin companies are being used as a tool for issuing debt, which further drives the development of stablecoins.I’m very curious,What impact will it have on the industry when the stablecoin ecosystem reaches a trillion-level scale?

People like Arthur Hayes believe that the growth of stablecoins will bring huge leverage to DeFi applications.But more specifically, for some DeFi applications on Plasma, and the changes in market competitiveness you have observed,How do you think the industry structure will evolve?What are the phased changes between now and achieving a trillion-dollar scale?How do you view this transformation process from today to the future?

Paul: This is a very complex issue involving changes at multiple levels.But I firmly believe that the future you describe is achievable.I think the process of achieving this goal will be more complicated, especially in the United States, where the strategic importance of stablecoins is increasingly valued.Scott Bessent once mentioned,Stablecoins have become the core strategic tool of global dollar monetary policy, because it can attract buyers who have no preference limits on debt prices.While it may sound like a conspiracy theory, it actually reflects the reality.Stablecoins do solve many problems and provide huge development potential in many areas.

Robbie: The market seems to have accepted this view.So more specifically, how will stablecoins affect the landscape of the blockchain industry when they are further integrated with other systems?

Paul: I thinkIn the future, the boundaries between on-chain and off-chain will become blurred.Institutional entry into the crypto space and the front-end and back-end definition of DeFi have been two hot topics in the past few years, but it hasn’t really started to happen until recently.The two are blending in a very practical way.Our current customers have begun to use solutions that connect on-chain and off-chain products.I believe that more similar products will appear in the future, which will support a centralized user interface through on-chain processes.This combination of on-chain and off-chain will become a key direction for industry development and is also a focus of our attention on Plasma.

Andy: I ​​totally agree with you.This may also be one of the reasons why you focus on Plasma One product development, right?Because stablecoins have very important application scenarios in cross-border payments, providing services to people without bank accounts, and helping people get strong dollars when they need them most.These are exactly what cryptocurrencies promised to achieve in 2017, and now crypto is regrouping around these use cases.

Paul: I thinkOne of the core values ​​of cryptocurrencies is permissionless currency.This is a very important concept.While this goal has been achieved longer than many people expected, it is now gradually becoming a reality.

Andy: So,Let’s talk about the PlasmaOne app and Neo Bank’s vision.Looking ahead to five years later, what are the news headlines you would like to see about the Plasma One app?What is your vision for this application?How do you plan to execute?

Paul: I thinkAs a core infrastructure, stablecoins are the perfect technology stack for building specific products for consumers.On the one hand, it can serve as an entry point for distribution; on the other hand, it can significantly improve the user experience of financial tools.As a user who has long-term stablecoins, I live in an environment with a sound banking system and can access good financial technology products.But I know that this condition does not apply to most parts of the world.Therefore, I think products built on stablecoins can provide users with a better experience than traditional banking systems.

This is exactly why we developed Plasma One, and it is also to demonstrate the potential of stablecoins.We work with many great companies that are also developing on Plasma.We do not exclude these collaborations because they obviously have great value.Plasma is a great example of how stablecoins can serve as a foundation to build truly amazing products.

Plasma’s distribution strategy

Robbie: Can you talk in detail about the core ideas of distribution strategy?I can probably understand this concept, but your statement just now gives me a new perspective.Can you further explain the specific meaning of this strategy and how you applied it in practice?

Paul: Of course.Our goal is to build a stable and efficient ecosystem, and the key to all this lies in the development of network effects.To achieve this, we need to ensure that Plasma’s applications can reach the widest possible user base, from B2B to B2C.Simply put, it is very important that our goal is to enable end users to truly access and use Plasma’s capabilities.In fact, this is also what Tron has performed outstandingly in the industry, and they have strong abilities in the distribution of stablecoins and user access.Because of this, we attach great importance to this link.To advance this, we need to develop some specific applications that can really demonstrate the potential of Plasma, and Plasma One is one of the core products we have created for this.

Andy: From theory to practice, the Plasma chain’s user experience seems to be more friendly than traditional cryptocurrency systems.For example, when considering the user base of the Plasma One app, I think of markets like Türkiye, Syria, Brazil, Argentina.Users in these regions are often the main target groups for stablecoins such as USDT.They usually don’t want to deal with complex seed phrases or face the cumbersome empowerment process.What they need is free money transfer services and a way to send funds to their families easily and safely.At the same time, these users also hope to protect privacy and even withdraw funds if necessary.While I know that blockchain is different from traditional payment systems in design, traditional payment methods do have advantages in some aspects.

Do you think that user experience is also an important consideration in Plasma chain design?Will user experience pay special attention to these needs when designing Plasma One apps?

Paul: 100% yes, totally agree.This is a great Plasma One recommendation and I fully support that.

XPL Token Value Accumulation Plan

Andy: I ​​noticed that Visa has a market cap of about $50 billion to $60 billion, while other companies that process trillion payments are within that range.Many people are paying attention to how XPL tokens accumulate value and whether it can play an active role in the Plasma network.At present, the revenue and token repurchase model has excited many people, but this may be just a short-term phenomenon.However, the crypto ecosystem is constantly evolving, and I think this is a positive trend.

How do you think XPL can be a sustainable asset?For those who want to compare XPL to Circle or other publicly traded companies, can XPL be the best way to get in touch with the stablecoin market?How do you make this vision a reality for XPL holders?What do you want to say to them today?

Paul: Of course I can share it.I think this is a question that our team has been thinking deeply about.For the Plasma ecosystem, XPL tokens must assume very core functions.

We hope to avoid the “dispersed chaos” situation, that is, many different entities accumulate some value but do not form a clear system. Such a model is ultimately not a long-term solution.When we design the value accumulation mechanism of XPL, we do face a lot of complexity, which is a topic we have spent a lot of time studying.In the future, we will further elaborate on the details in public.Although it is difficult to give a simple and direct answer now, I am sure thatThe design of our entire system is closely linked to the interests of the community.We will continue to move in this direction while ensuring that XPL tokens play a central role in the ecosystem.

Plasma and Tether Partnership

Andy: Tether’s co-founder mentioned in an interview that his mission is to bring startups from 0 to 1.He quoted Peter Thiel’s book and believed that Tether is no longer a startup.So, in what stage is Tether now in the growth process from 0 to 100?His answer was: “I feel like we’re still in the 0.25 stage. From here, our potential growth is limitless. Through innovation, we have many areas to disrupt, and there’s a lot to build. Once people understand the real strategy behind every thoughtful action we do every day, they realize the real potential of the company.” He defines Tether as “a once-in-a-century company.”In addition, Tether is seeking to raise $2 billion at a valuation of $500 billion, and the CFTC has also approved the settlement of stablecoins in the traditional U.S. derivatives market.

So, how important is Tether to Plasma’s future development?Maybe this question is a bit simple.Also, does your partnership with Paolo that promotes stablecoin development have an important impact on the policy level, such as the White House?What does this mean for Plasma?

Paul: First of all, if Tether is in the 0.25 stage now, then I think Plasma may still be in the 0.01 stage, and we still have a lot to do.While it sounds like the goal is far away, I think it is a hopeful start.Tether’s team has built a truly timely company and has achieved remarkable success through long-term strategic decision-making.This is also the direction we Plasma hope to follow.In the stablecoin field, USDT has performed very successfully.While I may be a bit biased, I do think it is true.Therefore, when we build Plasma, we always revolve around the USDT ecosystem.While we support a world of multiple stablecoins, Tether’s market dominance and extensive distribution network are very difficult to replicate.So we respect Tether very much and enjoy working with them very much.I have a lot of respect for Paolo and the team as a whole.

Robbie: Considering the crypto industry is changing every day, Plasma’s successful launch may give some people the first exposure to the project.What is the most important information you want them to know for these new users?Where can they go to learn more?

Paul: You can visit our official website plasma.to to learn more.I hope everyone knows that our goal is to be a leader in the stablecoin space.I believeStablecoins will become one of the world’s largest financial markets.Simply put,The growth of the global economy is an opportunity for stablecoins, and we hope to gain a place in this huge market.Our vision is very clear: global commerce will gradually shift to stablecoins, and Plasma will be an important driving force in this transformation.