A trillion-dollar opportunity for stablecoins: Is Plasma ready?

Author: Paul Timofeev, 0xyanshu Source: Shoal Research Translation: Shan Oppa, Bitchain Vision

The way we transfer funds has been evolving, from barter to gold to paper money and digital dollars.As stablecoins gradually swallow global payments and penetrate upward into other financial services, infrastructure built specifically for stablecoins has become crucial.In this report, we explore how Plasma can build a global track for future capital flows.

The evolution of digital dollars

Money is rarely still, and so is the way we transfer it.

Transferring value from one person to another is so basic and eternal.When ancient herders needed grains or tools, they traded cattle and sheep.If medieval farmers needed a pair of shoes, they would take bundles of wheat to the local village market.As time went by, people clearly realized that it was inconvenient to carry bulky items and livestock with them, so everyone turned to precious metals such as gold and silver.But soon they were discovered that they were not practical, so precious metals were melted into coins, which eventually gave way to banknotes, loan notes and banknotes.As technology becomes an increasingly important part of people’s daily life, the way money flows has also accelerated.

Today, a person in the United States can send digital dollars to friends in Peru or Thailand in seconds and pay a penny.This is not something they can do with local banks or Western Union; this borderless, low-cost, near-instant flow of funds is achieved through stablecoins.

Stablecoins are digital dollars issued and transferred on the blockchain track.They provide stable exchange units in digital form: Just as anyone with an email address or WhatsApp can communicate globally in real time, stablecoins enable anyone with internet access to transfer funds globally.

The funds transferred through stablecoins have reached hundreds of trillions of dollars.Their supply continues to grow and reaches new all-time highs.Although stablecoins are not new, their adoption has recently exceeded many expectations.

It’s impressive that stablecoins aren’t just growing.They are already eroding traditional payment networks.

At Shoal, we believe that stablecoins will inevitably eventually transcend payments, penetrate other financial services, and ultimately disrupt consumer banks, lending, B2B settlement, wage systems, and more.But this all begs the question: What’s special about these digital dollars?

The value proposition of stablecoins

“Tools can be created that allow end users to create a layer of currency protocols with stable value and pegged to external currencies or commodities. In this way, users of these currencies can have stable virtual currencies pegged to US dollars, euros, gold ounces, oil barrels.”— Mastercoin White Paper (2012)

Fundamentally, stablecoins are programmed digital assets designed to maintain the value of the underlying assets they anchor.Most commonly, stablecoins are pegged to fiat currencies, especially the US dollar (that’s why we call them digital dollars).To maintain this peg and stable value, stablecoin issuers implement specific mechanisms to ensure that each stablecoin is supported 1:1 by its underlying assets.The most common method is to hold cash and short-term U.S. Treasury bonds as reserves to match the supply of stablecoins in circulation.For each new stablecoin minting, the user deposits US dollars to the issuer.The funds are kept in regulated financial institutions and custodians.When stablecoins are redeemed, equal amounts of funds are withdrawn from these reserves and returned to the redeemer, and the corresponding stablecoin supply is removed from circulation, or “destroy”.

Short Supplement: There are other stablecoin pegging stability mechanisms, some of which are represented by founding stablecoin protocols such as Maker DAO (now Sky), who have established a CDP protocol that allows anyone to borrow DAI.On the contrary, there are examples of miserable failures like Luna/UST, which erase tens of billions of dollars in value.Overall, the design of the stablecoin is a fascinating rabbit hole, but it is worthy of our sober recognition that over 80% of the stablecoin supply is USDT and USDC, both of which are USD-backed stablecoins maintained and operated by centralized issuing entities.

The value proposition of stablecoins is by no means one-dimensional:

• Global, all-weather settlement: Stablecoins can be transferred worldwide at any time of day, any day of the week.They run on blockchain tracks and are designed to complete settlements in minutes or even seconds.For reference, traditional transfer systems such as ACH or international wire transfers usually take several days to clear and can only be processed within limited business hours, with further delays on weekends or holidays.

• Excellent user experience: StablecoinSpeed ​​and costThe simple foundation provides an experience that is superior to traditional payment systems.On some chains, stablecoin transfers can be settled in seconds.Traditional systems such as ACH or wire transfers can take hours to multiple working days.

Stablecoins are also several times cheaper than traditional payment networks.Stablecoin transactions are just a reallocation of balances on the digital ledger.The main resource consumed is the calculation power required to update this balance, which is a transaction orGas feePay in the form of payment.Today, as low-cost transactions have become a must for most chains, Gas costs are approaching zero.

In contrast, wire transfers or ACH transfers involve handovers between multiple intermediaries—sending banks, receiving banks, clearinghouses—all of which charge a considerable fee for the transferred funds.Traditional cross-border transfers still charge an average of 6.49%.

It should be noted that although stablecoins provide near-instant and low-cost on-chain transfers, converting funds downlink into bank accounts or cash, i.e. “withdrawals”, may still involve traditional fees, foreign exchange spreads and delays.But overall, even with this last step, stablecoin-based transfers are still much faster and cheaper than today’s traditional networks.

• Global access without permission: Stablecoins essentially allow people to access stable currencies like the US dollar democratically.Anyone with an internet connection can send, receive and hold stablecoins, whether they have a bank account or have access to financial services.Despite the increasing global financial inclusion, more than one billion adults today do not have bank accounts, do not have formal financial services, and are often excluded from the digital economy.At the same time, many countries still face hyperinflation and currency devaluation.By allowing people to access the dollar globally without permission, stablecoins provide financial lifelines for residents of these developing regions.

• Programmability: Because stablecoins are built on the blockchain track, they exist in the form of smart contract tokens.To put it simply: they are code.This unique design means that specific conditions and regulations (such as settlement rules, transfer restrictions, etc.) can be programmed directly to the asset itself.This programmability helps simplify operations because it is much easier and predictable than predicting human errors.And because the crypto-native economy is an open, license-free alliance of agreements, stablecoins can naturally access and enhance almost any application built on public chains: earning income by borrowing or providing liquidity, as collateral for borrowing other assets, margin for perpetual contract transactions, betting on quirky forecast markets, and more.

Localized, organic PMF

Stablecoins, unlike most other blockchain native innovations, have stood the test of time because there has always been an organic demand for them.Their history is largely defined by the organic adoption triggered by clear catalysts in each chapter.

The best friend of the trader

Stablecoins have first gained attention among traders, who are looking for an easy way to transfer value in volatility positions without fiat withdrawal.In the early 2010s, there was little to do except trade Bitcoin, but traders lacked an easy way to park funds between transactions.

Early mentions of the stablecoin concept first appeared in the Mastercoin white paper and went into production in 2014 with the launch of Realcoin, now known as Tether.

USDT was initially issued on Bitcoin through Omni Layer and is available through exchanges such as Bitfinex.When it was launched, USDT brought a new utility to crypto traders: transferring funds between assets, stabilizing exposure to volatility, and executing more complex trading strategies without having to transfer to fiat and then back to cryptocurrencies.That being said, given that the audience is so niche, its adoption is quite limited.

Get stablecoins worldwide

As stablecoins mature, their influence goes far beyond the speculative market.In countries plagued by hyperinflation, local currencies may depreciate significantly overnight, and the value of stable currencies such as the US dollar is difficult to underestimate.And today, the best way to get the dollar is through stablecoins.

Some notable data points:

• In 2024, stablecoin purchases accounted for 4% of Türkiye’s GDP.

• In 2024, Argentina ranked first in Latin America’s stablecoin trading volume share, with more than 61% of crypto trading volume in the region attributed to stablecoins.

• From June 2024 to June 2025, the amount of transactions through stablecoins in the Asia-Pacific region alone reached US$2.36 trillion.

• Sub-Saharan Africa (SSA) has increased on-chain value in 2025$205 billion, reflecting that cryptocurrency adoption has increased by 52% year-on-year since 2024.

As a result, stablecoins have become an important tool for personal savings, payments and remittances for millions of people in Latin America, Africa and most of Asia.

Best Friends of Reserve Currency

As stablecoins spread in emerging markets, their role in consolidating the dollar’s global dominance has become obvious.But while the value of accessing digital dollars in emerging economies is self-evident, it is even harder to reflect in the West, especially in the United States.Most Americans have savings accounts.They can send money instantly through apps like Venmo.Few people suffer from insomnia due to fear of the dollar depreciation overnight (20-30%).

The most compelling reason why U.S. policymakers support stablecoins isGeopolitics:To enhance the global dominance of the US dollar.The United States has long used the dollar’s reserve currency status to maintain its global financial strength, most commonly through the petrodollar system.

Today, this opportunity lies in the stablecoin.The idea is simple: the dollar stablecoins, almost all of which are backed by cash and short-term US Treasury bonds, requires real dollar reserves for every token issued.Every stablecoin minted is a new dollar chosen by someone overseas to hold and is therefore a new source of demand for U.S. government debt.

It can be said that the United States has no choice but to accept stablecoins at this point.In the fourth quarter of 2024, Tether was listed as the seventh largest foreign buyer of U.S. Treasury bonds, surpassing countries such as Canada and Mexico in annual funding flows.Tether’s latest stablecoin report confirms that Tether holds more than $127 billion in U.S. Treasury bonds, making it one of the largest non-sovereign holders of U.S. government debt.

This dynamic is already reshaping policies.The United States recently passed a landmarkGENIUS Act, for the first time, laid a regulatory framework for the issuance of stablecoins in the United States.Not surprisingly, the GENIUS Act requires that the dollar stablecoins must be fully supported by [U.S. Assets], in addition to providing monthly reserve disclosures and conducting independent third-party audits.This helps strengthen the flywheel effect of stablecoin-to-debt financing: each newly minted token effectively creates another buyer for U.S. debt, so stablecoin adoption becomes a powerful strategic tool to maintain the dominance of the dollar.Treasury Secretary Scott Bessent publicly stated: “We will maintain the United States as the world’s dominant reserve currency and we will use stablecoins to achieve this.”

In short, the dollar stablecoins are evolving from purely crypto products to a key tool in U.S. geopolitical strategy, which means the U.S. government is very motivated to see adoption of dollar-backed stablecoins continue to grow since then.

Today’s stablecoin pattern

These organic catalysts have helped shape and accelerate the adoption of stablecoins to this day.But to better understand where stablecoins will go, it is necessary to amplify and examine the current pattern of their existence.

In the last 30 days only:

• Stablecoins process $3.2 trillion in transaction volume

• On-chain stablecoin transactions reached 1.2 billion

• 41.4 million addresses interact with stablecoins

The total supply of stablecoins continues to reach new all-time highs, which has exceeded $291 billion today.USDT accounts for about 58% of the total supply and has remained dominant for many years.

Another important aspect of today’s stablecoin landscape is the distribution of stablecoins on different chains.Just as the stablecoin supply is dominated by USDT, the distribution of stablecoins on the chain is also dominated by Ethereum, currently accounting for about 55% of the total supply, and the same is true for the total stablecoin transaction volume.

Having said that, it is important to recognize that there are more subtleties to be paid attention to here.

Although Ethereum’s dominance cannot be underestimated, it is largely historic.The first stablecoins like USDT, USDC and DAI were all on Ethereum, as there was no other blockchain track at the time that it could issue and develop programmable digital dollars.As liquidity deepens on Ethereum, it creates a lasting moat that still exists today.

But when we consider specific use cases, the subtleties begin to appear:How are stablecoins used on their respective chains.

For example, if we observe pure peer-to-peer trading volumedata(We can map it to payments), it is clear that tron ​​has grown steadily and has become the first choice for people.This is not surprising to anyone who has actually used both chains; trading on Tron is cheaper and faster.They are easier to access for everyday users.The data reflects this.

In short, the stablecoin landscape is broad and expanding, but is still highly concentrated on specific stablecoins on a specific chain.At first glance, the winner and loser seem to have been confirmed.However, the current infrastructure challenges and pain points show that this is not the case.

Current challenges and pain points

Despite the high scale and adoption of stablecoins, today’s stablecoin track is not designed to serve global payment networks beyond the crypto-native track.In particular, today’s stablecoin infrastructure has shortcomings in three key areas: large-scale performance, practical user experience, and integrated infrastructure with fiat currency tracks.

Large-scale performance

Since the Ethereum L1 Gas Fiscal War, the standards of chain performance and network capacity have made considerable progress.The cost of stablecoin transfers could be as high as dozens of dollars during peak network congestion on L1, and has now dropped significantly and stabilized.Even so, most public blockchains still lag behind traditional payment networks in terms of scalability and uptime.Ethereum and its L2averageThe daily TPS is approximately 244.SolanaUsually handledTPS of 2-3K daily, which has previously peaked at 4.8K (although it is always necessary to point out the nuances between voting and non-voting transactions).However, the global payment network is designed to support tens of thousands of TPS and cannot afford downtime even during peak congestion.

There are many promising developments to improve this in the future.From the rise of perpetual contract DEX chains for specific applications to Solana’s Firedancer and Alpenglow, to the performance that Monad and MegaEth are expected to provide, and the rise of SVM L2.However, none of these are specifically targeted at stablecoins.Stablecoin transfers on these chains are still competing for more block space with swaps, perpetual contracts and everything else users can do on these chains, as network activity and adoption rates are expanding.

User Experience

Although on-chain transactions are much faster than settlement through banks, the user experience remains clumsy.The Boston Consulting Group’s 2025 stablecoin report notes that “Gas token management for transaction fees” and fragmented liquidity are key technical barriers for retail and business users when using stablecoins to pay.

The most obvious and easiest problem to solve is the Gas token friction: people who receive USDC on Ethereum or Solana themselves need ETH or SOL to transfer or spend their funds.For new users, getting started is still unrealistic.

Liquidity is another challenge.Stablecoin supply is currently fragmented on hundreds of chains, making it even more difficult to transfer large amounts of funds or guarantee instant conversions to fiat currency outside of Ethereum.This fragmentation also dilutes the network effect, forcing users and institutions to deal with bridging, Gas tokens and liquidity sources rather than relying on a single, unified liquid market.

On today’s stablecoin infrastructure,Lack of privacy.Public blockchains will expose transaction details by default.Although there are privacy-protecting applications, users must deliberately look for and use them.There are no integrated “switches” to enable privacy transactions.This means that daily payments made with stablecoins are much more transparent than cash or even traditional banks.For individual consumers, this may just feel like privacy is being violated.For enterprises and financial institutions, this is simply unacceptable.

The on-chain user experience has improved significantly, but there is still room for improvement.

Lack of integrated infrastructure

One undervalued challenge facing today’s stablecoin track is the lack of integrated infrastructure, especially integration with fiat currency tracks.Sending USDT to friends is not the same as they are able to spend it at the grocery store.In fact, when users try to transfer between blockchain tracks and local payment systems, they still face forex spreads, hidden fees and compliance bottlenecks.

Withdrawal involves the use of centralized exchanges or other intermediaries that require users to create an account, usually require KYC verification and pay service fees.This can become more troublesome for cross-border transactions, as this usually introduces more intermediaries and foreign exchange spreads, further eroding the amount transferred.

Before stablecoins are seamlessly integrated into fiat tracks, they are very useful for transferring value between cryptocurrencies, but are still largely impractical when it comes to mainstream global payments.

So where should we go next?

Stablecoins have crossed the gap.They are no longer niche by-products of the crypto market.They process trillions of dollars in transaction volume each year, sometimes even monthly, and already power crypto trading, DeFi and peer-to-peer markets in emerging economies.

But this level of adoption, although significant, is different from the requirements required as the backbone of the global financial track.Settlement systems like VisaNet, SWIFT, and ACH operate under stricter requirements: near-instant finality, reliability, and a unified compliance framework across different jurisdictions.Stablecoins have shifted huge numbers, but the chains they run are never designed to meet these standards continuously on a global scale.

One solution is to wait for the general chain to develop and harden into payment-level infrastructure.Another is embracing infrastructure built specifically for stablecoins.

Infrastructure built specifically for stablecoins

Almost all major industries that are required for reliability, risk management and performance are built around specialized infrastructure.

Global payment networks like Visa and SWIFT are all built specifically to securely transfer funds around the world, operating in isolated environments optimized for data integrity, regulatory compliance, and uptime.In cloud computing, financial institutions and research centers do not use AWS or Google Cloud, they still rely on dedicated settings built to handle massive amounts of physical data.In the financial sector, high-frequency trading companies juxtapose servers with exchange matchmaking engines because general infrastructure cannot provide the required latency and reliability in markets where every millisecond is critical.In areas such as healthcare, insurance or finance, LLMs (large language models) trained with industry-specific data always outperform their general model for accuracy, error rate and regulatory consistency.

There is no difference in the world of cryptography.The standards that are crucial to the expansion of the Internet—RSA for secure communication, SSL for browser authentication, and ECDSA for digital transactions—are specially built for a single task: protecting and verifying data between the two parties online.

Stablecoins are now at that turning point.

Application of application chain theory

Blockchain follows the same logic.As applications gain appeal and activity scales, the limitations of the general chain appear.Unpredictable Gas fees, throughput caps, compliance gaps.There are countless lists.In response, applications are increasingly motivated to launch their own chains.

We have seen this: decentralized exchanges like Osmosis, dYdX and recently Unichain; games and NFT platforms like Immutable; data networks like Python; all adopt some form of application chain model.This theory originated from Cosmos, which argues that applications should have sovereign block space optimized for their needs while still being able to interoperate with a wider ecosystem.

When a chain is built for a purpose, it can provide deterministic performance and predictable pricing without being limited by unrelated block space requirements.It can be embedded with compliance procedures, disclosure and risk management tailored for regulated products.It can align economic incentives, governance, and value capture directly with the needs of its user base and community.

Application-specific infrastructure allows the chain to get rid of a one-size-fits-all environment, enabling more customization, stronger performance and better user experience.Given the trajectory of stablecoins adoption, we believe it is only a matter of time before stablecoins require the same dedicated infrastructure.Plasma is one of the first teams to build directly toward this vision.

Plasma: Blockchain specially built for stablecoins

Plasma is a new L1 designed for stablecoin flow.It combines a custom consensus protocol, an EVM-compatible execution layer and a dedicated smart contract to support high performance at scale while publishing state roots to Bitcoin through native Bitcoin bridging for security.

Plasma’s mission is simple: to change the way global capital flows through professional stablecoin infrastructure.Just as TCP/IP makes the Internet a global information center, Plasma aims to empower stablecoins to become global payment centers.

Plasma aims to address the pain points of today’s infrastructure – performance, user experience and integration with its core capabilities:

• First day liquidity: Plasma will have native USDT and $2 billion in first-day stablecoin liquidity when it launches.

• Zero Fee USDT Transfer: Through Plasmafront endIt is free to make a direct USDT transfer.Gas fees are subsidized through Paymasters contracts within the agreement, using authorized transfer controls to limit rates and prevent abuse.

• Custom Gas: Users and apps on Plasma can pay Gas fees using whitelist tokens.When launched, Plasma will support payment of Gas fees using native USDT and pBTC.

• Special architecture: Plasma is built on a modular architecture, combining custom high-performance consensus protocols and an EVM-compatible execution environment.

• Bitcoin Security: Plasma anchors its state root to Bitcoin through a bridge of minimal trust for direct BTC-EVM programmability.This bridge also supports native BTC deposits that are converted to pBTC on Plasma.

• Integrated infrastructure: When launched, Plasma will support more than 100 DeFi applications, including leading protocols such as Aave, Ethena, Fluid and Euler, as well as a variety of physical peer-to-peer cash networks.In addition, Plasma will support a broad ecosystem of developer tools and infrastructure covering account abstraction, on-chain analytics and block browsers, interoperability protocols, oracles, indexers and RPC providers.

To better understandHow exactly does Plasma implement these functions, it is necessary for us to study its core architecture more deeply.

System architecture

Basically, Plasma is a Bitcoin sidechain that maintains its own consensus and publishes proof of status to Bitcoin.It is built on a modular multi-layer architecture, combining a custom BFT consensus protocol (PlasmaBFT), a Reth-based EVM-compatible execution environment, a minimal trusted Bitcoin bridging and a protocol-native stablecoin smart contract.

Transactions on Plasma begin at the user layer, through a supported front-end.It is broadcast to the Plasma chain via RPC.From there, it passes consensus, and once 2/3 of PlasmaBFT validators verify it, the user’s transaction is executed.Plasma then periodically publishes the status root to Bitcoin through its native bridge.

PlasmaBFT

Consensus is the core of the on-chain system.It is a coordination mechanism that distinguishes blockchain from banks and fintech: it is not a single institution, but a decentralized network of distributed nodes to verify incoming transactions.However, this design mechanism introduces latency, especially when networks scale and add more validators, which is the price at which many chains currently sacrifice performance.

To overcome latency bottlenecks, Plasma introduced PlasmaBFT, a custom consensus protocol designed to support high throughput.PlasmaBFT is a pipelined implementation of the Fast HotStuff protocol written in Rust.Finality is deterministic and can be achieved in seconds.

As the name suggests, PlasmaBFT follows the classic **Byzantine Fault Tolerance (BFT)** assumption.In practice, this means that the network can remain secure as long as the number of malicious validators does not exceed one-third (this can be expressed as n ≥ 3f + 1, where n is the total number of nodes and f is the Byzantine number of nodes).

To participate, the validator must stake XPL and run supported hardware (2 CPU cores, 4 GB of memory, SSD-based persistent storage).They are then selected to propose and verify blocks on Plasma based on the XPL stake weighted voting process.

The agreement passedDouble-strand submission processCome and finalize the block.Verifiers vote on block proposals once two consecutiveLegal Certificate (QC), the block is finalized.QC is a validator proof of aggregates; link them together to enforce a single canonical history.

PlasmaBFT is optimized to support high performance on L1.This is thanks to Plasmaassembly lineUse: When a block is being finalized, the next block can already be proposed.Therefore, the block can be finalized in just two rounds.

This design comes fromFast HotStuff, this is a modern BFT protocol designed to achieve fast speed.HotStuff introduces leader-based structures and QC links to reduce communication overhead.Fast HotStuff further optimizes the [chain commit path for lower latency and higher throughput].

Like HotStuff, PlasmaBFT usesLeader-based turn structure, aims to minimize communication overhead while still maintaining fault tolerance.The leader proposes blocks, validators vote, and once enough votes are collected, a QC is generated.If a leader fails or is offline, the protocol uses aggregated QC to transfer to a new leader.

PlasmaPlan to expand validator participation in several phases.Initially, the biggest priority will be to ensure baseline network stability, so Plasma will be protected by a set of whitelist validators at release.Over time, the validator collection will grow to perform performance stress testing under a larger committee until the final stage, i.e. open participation to the public.

Plasma’s execution environment

Virtual machines (VMs) process transactions, run smart contracts, and keep state synchronized between all participants on their underlying chains.The VM reads the current state of the chain, executes new inputs, and then updates the state deterministically.It ensures that the same code always produces the same result and that the state is synchronized across all nodes.

Plasma uses a common Ethereum Virtual Machine (EVM) execution environment.This means developers can deploy existing EVM smart contracts and use familiar tools and infrastructure.

Plasma’s execution engine isReth, a modular, Rust-based Ethereum client that separates consensus from execution.This makes updates more efficient, the boundaries between block production and execution clearer, and makes performance and behavior more predictable.

When transactions are submitted on Plasma, Plasma’s execution environment processes them through the EVM, ensuring that the relevant smart contracts run and that the status remains consistently updated across all Plasma nodes.

Bitcoin-level security

Blockchains usually ensure themselves security only through their own collection of validators.This security is limited by the size of the validator pool and the economic weight behind it.For stablecoins, relying solely on a new or relatively small set of validators can be risky because of the large amount of value involved.

To alleviate this problem, PlasmaRegularly publish its status root to Bitcoin.Anchoring to Bitcoin provides additional settlement guarantees: Once a Plasma state is recorded on Bitcoin, changing it will require rewriting the history of Bitcoin.This makes review or rollback far less feasible and gives Plasma a stronger security baseline than relying solely on its collection of validators.

Plasma byA Bitcoin native bridgeAchieve this.The bridge consists of a network of validators, each running a full Bitcoin node to observe the deposit and verify the status anchor.Plasma’s state roots are submitted to Bitcoin regularly via transactions (such as OP_RETURN), and the validator network proves that these anchors match Plasma’s canonical chain.

In addition to settlement, the bridge also allows native BTC to flow into Plasma.The user deposits BTC at a specified address, the verifier confirms the transaction on Bitcoin, and then Plasma mints pBTC: an interchangeable ERC-20 token supported by BTC 1:1.Withdrawal follows the reverse process: the user destroys pBTC on Plasma, and once the verifier confirms, the BTC will be released on the base chain.

This bridge allows native BTC to be used internally on Plasma smart contracts.pBTC is issued as a standard ERC-20 and is built on LayerZero’s OFT standard to allow cross-chain portability without affecting its underlying BitcoinVerification.Users always receive pBTC of equivalent value to deposited BTC at a rate of 1:1 on Plasma.

To ensure withdrawals are secure, Plasma relies onMulti-party computing (MPC).Instead of holding the private key by one party, the signature is generated by multiple validators, and no single entity can unilaterally release funds.

Stablecoin native smart contract

On the current stablecoin track, stablecoins exist in the form of universal ERC-20 tokens.They are applications built on the basic chain.This design works to some extent, but there is still friction: transaction fees are paid in separate Gas tokens.Each app or wallet must operate and maintain its own custom Paymaster.Privacy payment is not feasible.

On Plasma, this feature is built directly into the protocol.A groupContract within the agreement, written in Solidity and integrated into the execution layer, giving stablecoins first-class citizens treatment.These contracts are written in Solidity, integrated into Plasma’s execution layer, and are compatible with any EVM wallet or contract system, including AA standards such as EIP-4337 and EIP-7702.

Plasma will launch two core modules.The first one isAgreement Management for Zero Fee USDT Transfer Paymaster.This contract sponsors the Gas cost of direct USDT transfers (transfer() and transferFrom()), so that users can send stablecoins without XPL.Its scope is very narrowly designed: it only applies to the official USDT, and only applies to direct peer-to-peer transfers, not to any contract calls.To prevent abuse, qualifications are limited by lightweight identity checks such as zkEmail, zkPhone, or verification code systems, and use is rate-limited.Its economic model is covered by a pre-funded XPL pool managed by the Foundation, which pays Gas fees on behalf of the user.In addition to routing money through standard smart account processes, developers do not need to perform custom integrations, and the system supports EOAs and smart contract wallets.Over time, Plasma is exploring features such as retaining block space for eligible USDT transfers to ensure it can be included even in the event of network congestion.

The second module isERC-20 Paymaster for customizing Gas tokens.This contract allows users to pay for any transaction using whitelisted tokens (which will initially be USDT and pBTC) rather than just transfers.The process is simple: the user authorizes the paymaster to spend the selected token, the paymaster consults the oracle to calculate how much the token is equal to the required Gas, and then pays it to the validator in XPL behind the scenes, while deducting an equal amount from the user.This eliminates the need for swaps or native token balances, simplifying the introductory process for new users.Developers benefit from this because paymaster is handled at the protocol level, so they do not have to build or maintain their own cost abstraction system.The wallet only needs to display authorization and processing errors, while the user sees a unified and intuitive user experience.

By running these modules at the protocol level, rather than leaving them to individual applications, Plasma ensures behavioral consistency between applications, subsidizes Gas without external funding tokens, and binds these functions directly to block production and execution.

Economics of XPL and Plasma

The core of Plasma’s business model is itsNative Token XPL, it is used to protect the network and subsidize PlasmaBFT validators.

Each transaction on Plasma requires a base fee and a dynamic fee based on demand.These fees, together with newly issued tokens, form a reward pool that maintains validator incentives.

PlasmaPunishment is notA unique approach was taken.Instead of punishing malicious validators, it passes through a novelRewards and punishmentsMechanisms to inspire honest behavior.In this model, validators who misbehave or fail to participate will lose their block rewards but retain their principal stake.The penalty is lighter, but it reduces the risk of institutional operator participation, as sudden capital losses are generally unacceptable in business.Importantly, Byzantine security remains preserved under the standard assumption of less than one-third of the validators’ malicious behavior.

Validators receive XPL compensation for proposing blocks, voting in consensus, and verifying transactions.Their rewards come from a mix of transaction fees and token emissions, allowing validator incentives to be directly linked to network activity and the broader XPL economics.

Plasma Ecosystem

The technical work around Plasma is a growing, integrated ecosystem.Plasma is taking$2 billion in stablecoin liquidity and over 100 DeFi integrationsLaunched, which includesAave, Ethena, Fluid, and Eulerand other well-known projects.

Plasma recently announcedPlasma One, which is its main consumer-oriented application.As a stablecoin native wallet and card interface, it provides users with a “one-stop” place to hold, send and consume USDT.Transfers are free of charge, the balance can be used directly for payment, and the process of getting started is very fast, and a virtual card can be issued in minutes.

In terms of integration, Plasma has already been withBinance EarnCooperation allows users to access revenue products directly from the network.In addition, work on fiat currency inbound and outbound channels and peer-to-peer cash networks with emerging markets is also underway, aiming to make the conversion between stablecoins and local currencies less dependent on centralized exchanges.

Plasma will also launch an extensive ecosystem of developer tools and infrastructure covering account abstraction, on-chain analytics and block browsers, interoperability protocols, oracles, indexers and RPC providers.

The prospects of Plasma

Given what we know about Plasma now, it is worth amplifying and thinking about some of the most important catalysts and considerations that influence its path to future development.

Competitive landscape

Plasma has an ambitious and important mission: to change the way funds flow globally.Not surprisingly, they face competition from multiple angles.

First, the general blockchain will not disappear.Ethereum still dominates stablecoin liquidity and network effects.Tron has the largest share of USDT transfers and peer-to-peer transaction volume, and Solana is constantly working on development to improve performance.Meanwhile, new chains like Monad and MegaETH are also competing on high performance and full EVM compatibility.

Meanwhile, we see something similar to PlasmaStablecoin dedicated chain, or the rise of “stability chain”.Circle is being builtArc, a licensing chain designed for regulated USDC settlements.Stripe is working onTempo, focusing on embedding stablecoins into merchant payments.Google recently announcedGoogle Cloud Universal Ledger (GCUL), This is an L1 focused on providing digital payments and tokenization to financial institutions.Meanwhile, other projects stand out with differentiated approaches and unique value propositions.For example,PayyNew bank stablecoin infrastructure has also been introduced, including its own dedicated chain, but the core focus is on privacy-protecting transfers.

Even outside of cryptocurrencies, the non-blockchain payment track is already converging to offer many of the same key advantages as stablecoins.This means that Plasma must not only meet the cryptographic benchmark, but also meet the performance, speed and coverage of these traditional standards.

Focus areas

With that in mind, what are the key areas of focus that can help the Plasma team?

first,distributionIt’s everything.Like any enterprise, a chain cannot grow if it cannot deliver its products to users.For blockchain, this is mainly limited to crypto-native applications, exchanges, connected chains and DeFi protocols.Although Plasma launched with over 100 integrations and $2 billion in liquidity, the tougher challenge is to go beyond crypto-native adoption and enterRetail and enterprise encryption related use cases.Plasma plans to support over 100 countries, over 100 currencies and over 200 payment methods, laying the foundation for a strong initial distribution footprint.However, maintaining real-world adoption will require ongoing efforts: settle in merchants, work with fintech partners, and leverage Tether/Bitfinex’s existing network.The rise of Tron shows the power of grassroots distribution.The question is whether Plasma can retain users and build lasting channels outside its cryptographic native foundation.

LiquidityIt is another area of ​​focus.For a chain specially built for stablecoins, deep liquidity is the foundation of survival.Plasma is launching with billions of native USDT circulations, making it the eighth largest USDT chain on day one.To ensure it can sustain future growth, the bridging, channel and deposit processes must be as simple and frictionless as possible.

privacyIt’s another underrated part.Confidential payments are already in the plan, but will not be released with Plasma’s mainnet beta.The core idea being explored is to protect sensitive transfer data while maintaining composability and auditability.This feature will initially be implemented as a lightweight, optional module, although Plasma will likely seek to solidify privacy features on the protocol layer in the future.

With its novel architecture, ecosystem coverage and liquidity foundation, Plasma is in a good position:

• Anchor to BitcoinProvides a differentiated advantage.Plasma regularly publishes its state roots to Bitcoin, providing additional settlement guarantees beyond relying solely on its collection of validators.

• In addition, as aPublic, permissionless chain, Plasma can reach a wider audience while enforcing features like identity-based transfers to enable professional experiences such as zero-cost USDT transfers.

• useCustom consensus protocolEnable Plasma to support fast execution at high throughput.

• Launched on the first day, it has over 100 DeFi integrations and $2 billion USDT, making it the eighth largest chain calculated by stablecoin supply from day one.

Applications and Use Cases

Plasma provides tracks that support a variety of stablecoin-specific use cases and applications.

Global payments and remittances

One of the most direct applications is as a global payment track.A worker in the United States can send $100 USDT to relatives in Nigeria.The relative can then be consumed directly through the integrated merchant, directly using the crypto card, or cashed through the local OTC counter and exchange.

In countries such as Nigeria, Argentina and Türkiye, stablecoins have served as a lifeline for hedging inflation and remittances, and Plasma can further reduce friction.Success here depends on integration with local wallets, ATMs and payment systems.Tron has achieved this through years of grassroots promotion, so Plasma will need a similar partnership that may leverage Tether’s existing network.If executed well, Plasma can serve as a backend for a remittance company or new bank, offering instant dollar transfers without their own blockchain infrastructure.

Merchant payment and micro payment

Paying in cryptocurrency has always been rare due to volatility and fees, but zero-cost USDT transfers on Plasma can change that.Merchants can accept stablecoins through QR codes at the point of sale, thereby avoiding credit card fees and refunds.

Privacy features will allow businesses to hide revenue data from competitors, and micropayments will become feasible.The platform can charge several cents for each article, streaming or download without worrying about the cost eroding profits.For merchants, the key will be user-friendly tools and regulatory compliance.Stablecoin payment processors may appear on Plasma, and over time, even traditional vendors may integrate it in areas where fees are high or under-banked services are not available.

Forex and cross-currency trading

The stablecoin market has surpassed the US dollar, and the euro, offshore yuan and gold-backed tokens have begun to circulate.If multiple fiat stablecoins are supported, Plasma may become an on-chain forex center.

For example, a user can swap USDT to EURT on a Plasma-based DEX at a cost of nearly zero.This makes forex trading faster and cheaper than through the bank.Imagine a multinational company paying European suppliers by instantly converting millions of dollars into euros and checking transactions on-chain.This will require deep liquidity, but zero fees and institutional demand may attract market makers.

Stablecoins and BTC’s DeFi

Plasma’s EVM compatibility opens the door to decentralized finance focused on stablecoins and Bitcoin.Potential applications include:

• Stablecoins DEXes and AMMs: Trading of low-cost, high-volume stablecoin pairs (USDT/USDC, USDT/EURT) or stablecoin/BTC pairs.

• Money markets and lending: The platform allows users to lend or borrow USDT with BTC as collateral.

• BTC-DeFi Innovation: Minting stablecoins supported by Bitcoin on Plasma without custodians.

Institutional Vault and Settlement

Institutions such as exchanges, fintech companies and even banks can use Plasma as the settlement layer for large-scale transfers.Due to its speed and zero fees, exchanges may prefer Plasma over Tron or Ethereum to handle USDT flows between exchanges.

Banks or corporate consortiums can also run private overlays on Plasma to settle large interbank transfers with the finality of Bitcoin support.For a company vault, it may only take a few seconds to transfer $50 million between subsidiaries, rather than days like SWIFT.The Privacy Module will allow for selective disclosures to auditors or regulators.If U.S. legislation like the GENIUS Act makes progress, regulated agencies may adopt public stablecoins like USDT and USDC, and Plasma is expected to capture that demand.

Apart from that, there are more crypto-native use cases, and we’d love to see the team explore building on Plasma.Zero Fee USDT Transfers can be built on PlasmaSelf-Agent Payment InfrastructureProvide a very attractive case.With the $2 billion deployed on the first day, Plasma can provide in-depth stablecoin liquidity, which is needed to predict that the market maintains meaningful user activity.Plasma can also serve as a routing layer for stablecoin liquidity across multiple chains.

Summarize

Plasma’s mainnet beta version is now available.We are excited to see how infrastructure built specifically for stablecoins will grow.Stablecoins will surely disrupt other parts of the global payments and financial services sector, but they require dedicated, purpose-built tracks to flourish.Although Plasma isn’t the only project to chase this Polaris, it offers one of the most promising solutions to grab this oneTrillion dollar stablecoin opportunity.