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Author: Ryan Yoon, Source: Tiger Research, Compiled by: Shaw Bitchain Vision
1. Do you really understand stablecoins?
Global interest in stablecoins is growing.However, many people still don’t know the difference between stablecoins and traditional digital payment methods.Part of the reason is that the digital financial system has long been well known.Credit cards and mobile wallets have long become carriers of digital transactions.
Against this background, a question arises: Do we really understand stablecoins?
Stablecoins are digital assets pegged to fiat currencies such as the US dollar and are designed to keep prices stable.Their main difference is that they rely on blockchain rather than traditional financial infrastructure.Blockchain technology supports peer-to-peer transactions without the need for intermediaries such as banks, payment processors or card networks.
In a fiat currency-based system, banks, credit card companies and remittance service providers act as multiple intermediate links.Each additional intermediate link will bring time delay and higher costs.Cross-border remittances usually take several days or even weeks to complete, and they are expensive.Transactions are also subject to bank business hours and cannot be processed on weekends and holidays.
Stablecoins directly connect users through the blockchain network, eliminating these frictions.No approval or permission is required.As long as you have an Internet connection, you can transfer money instantly anytime, anywhere.Functionally, this is similar to the delivery of physical cash, but it adopts a digital, borderless form.
These attributes are transformed into four core values:Licensed-free access supports global financial inclusion; programmability to automate financial processes; low cost and efficiency; high speed real-time global settlement infrastructure.
Give an example.A freelancer in Argentina can open a digital wallet to save dollars without bank approval.Smart contracts enable automatic monthly deposits.Currency exchange costs dropped from USD 10 to USD 0.10.Within seconds after payment is received, income can be converted into stable dollars, thus protecting against inflation.
Together, these applications show how stablecoins can break through traditional financial boundaries.They provide new ways to save, consume, transfer money and make profits.
However, the threshold for application of stablecoins is still high.Users must browse multiple blockchains, manage wallet addresses, protect private keys, and transfer assets.Each task requires technical expertise that most users lack.
To fully realize the potential of stablecoins, simplifying infrastructure is crucial.Just as Google Chrome simplifies network access, stablecoins require a similar underlying service to enable widespread availability.
2. Plasma as a stablecoin “Chrome”
Internet Explorer (IE) has promoted the popularity of network access, but although it initially occupied 95% of the market share, it still has problems such as slow speed, poor security, and poor standard support..Since there were no other viable alternatives at the time, users could only endure complex plug-in installations, frequent crashes and slow performance.
In 2008, Google Chrome changed everything.Its performance has been improved by nearly ten times and adopts a multi-process architecture to ensure stability.Automatic update function improves security.Complex technologies disappear behind the browser, bringing users a fast and reliable network experience.Within five years, Chrome browser surpassed IE browser and became the world’s leader.
The stablecoin market is facing similar dilemmas.Existing blockchains support stablecoins, but like IE, they have failed to reach their full potential.High fees, complex processes and frequent network congestion have become unavoidable reality for users.
Plasma is entering this field as a high-performance Layer-1 blockchain dedicated to stablecoins..Just as Chrome redefines web browsers, Plasma is also committed to redefining the stablecoin infrastructure.
2.1. PlasmaBFT
Traditional blockchains usually take minutes or even hours to complete the final confirmation of a transaction.On Ethereum, sending USDT during network congestion can face prolonged delays.Plasma fundamentally solves this problem.With its new consensus mechanism PlasmaBFT, transactions can be finalized in one second.
Fast HotStuff algorithm accelerates consensus.In short, it ensures that participants agree with fewer steps.Multi-node signatures are aggregated, simplifying the verification process.The number of messages exchanged at each step has also decreased.A new block proposal is started without waiting for the completion of the previous block.Therefore, the overall throughput is improved.Under optimal conditions, finality is achieved with just two consecutive proofs.
The comparison with the browser is very inspiring.In Internet Explorer, a stuck tab page can cause the entire application to crash.Chrome solves this problem by setting up independent processes for each tab, thus enhancing stability.Similarly, Plasma optimizes transaction processing and improves the stability of the entire network.
2.2. EVM compatibility
The most critical factor for developers is the use of existing knowledge and tools without modification.Chrome fully supports the web standard, allowing developers to get rid of IE browser compatibility issues.same,Plasma also supports all Ethereum applications and tools without modifying code.
Developers can work in familiar environments.Plasma is built on Reth, a high-performance Ethereum client written in Rust, and is fully EVM-compatible.Smart contracts can be moved to Plasma without modifying any code, eliminating the major entry barrier.
This analogy is very clear in browsers.When users migrate from IE to Chrome, the website works properly without tuning.Similarly, Plasma can integrate seamlessly with the existing Ethereum ecosystem.
2.3 Native Bitcoin Bridge
Plasma is developing a Bitcoin bridge that is parallel to its stablecoin infrastructure.The program has two main goals: issuing stablecoins collateralized by Bitcoin, and building a financial ecosystem centered on Bitcoin..
In a stablecoin system, the reliability of collateral assets is crucial.Bitcoin has been verified for 15 years and is currently the safest digital asset.However, due to the lack of native smart contract capabilities, its application as a direct collateral is restricted.
Traditionally, centralized custodians hold Bitcoin and issue encapsulated tokens.This model introduces two long-standing problems: single point of failure and high transaction costs.
Plasma’s native bridging solves these limitations, which allows Bitcoin to be transferred directly into an EVM environment where it can function as a programmable collateral.
This approach expands its role in financial applications while retaining Bitcoin security.It also incorporates Bitcoin into the DeFi ecosystem, allowing users to hold Bitcoin while using stablecoins such as USDT to trade, thus promoting the development of a Bitcoin-powered financial environment.
2.4 Zero handling fee USDT transfer
Zero handling fee USDT transfer is the core function of Plasma as a stablecoin infrastructure.Just as Chrome has subverted the browser market with free access, Plasma is committed to promoting the popularity of stablecoins through free transfers.
Users only need to hold USDT.The system-level payer will pay the transaction fee on his behalf.This applies only to official USDT token transfers.Basic authentication and transfer limits prevent abuse.
In fact, the Plasma Foundation allocates a fee budget to pay for the handling fee.Users can complete all transactions with just USDT without paying any formalities.
2.5 Custom fee tokens
Traditional blockchains limit fees to native tokens.Ethereum requires ETH, Polygon requires POL, and Tron requires TRX.Users must manage tokens other than USDT.
Plasma eliminates this friction.Users can pay fees directly using familiar assets such as USDT or BTC.They select a token from the approved list and then set the fee by a trusted oracle based on the real-time exchange rate.
2.6 Confidential payment
One of the core features of blockchain is transparency in transactions.Anyone can view the transaction amount, sender and receiver.This ensures openness, but also limits privacy.In contrast, although traditional finance protects privacy, it relies on regulation.
Plasma is working on a confidential payment module that can be applied selectively as needed.Just like Chrome’s choice between normal and invisible mode, transactions can be kept public or private depending on the situation..
Technically, the recipient’s identity is hidden through a one-time address, and the transaction details are encrypted in the memo.The system runs in an EVM environment and ensures compatibility with DeFi.
Importantly, regulators can still access information when anti-money laundering or tax compliance requires it.This balance protects privacy without sacrificing regulatory standards.
3. Plasma: Current Situation and Future
Plasma is currently receiving strong attention from the market.The XPL token release ends in a few minutes.The Binance Earn event reached $1 billion before it quickly ended, attracting more than 30,000 participants.However, maintaining growth requires not only technological advantages, but also a more comprehensive strategic approach.
Chrome’s success provides useful reference.Initially, Chrome attracted users with its superior speed and performance.However, its true growth engine is to expand the ecosystem.Everyday tools like MetaMask and DeepL run seamlessly on Chrome, turning it from a browser to a digital platform.
Plasma follows a similar trajectory.At present, it focuses on the construction of core infrastructure before the main network is released.Zero fee transfer and EVM compatibility are comparable to Chrome’s speed advantages.However, the critical stage is still to come.
Plasma knows the importance of ecosystem development.This commitment is reflected in collaboration with popular DeFi protocols such as AAVE, Pendle and Ethena.Through the Community Builder Program, Plasma actively recruits developers.These early investments set the stage for diversified services, just like Chrome’s extension ecosystem.
The real potential lies in unlocking new areas of service.High fees have previously hindered the implementation of use cases such as microcredit, real-time wage payments and content services based on micropayments.With Plasma, these use cases will become economical and feasible.With the emergence of such services, Plasma’s practicality and user base will be greatly expanded.
Plasma’s ultimate goal is to achieve the same effect as Chrome brings to the Internet.Complex technologies are hidden, and users experience simple and intuitive functions.The key to developing a stablecoin into a true digital currency is availability, not technical complexity.
Plasma aims at this point and strives to become “Chrome in the stablecoin field.”
