Bankless: Plasma wants to lead the stablecoin craze

Author:David C Source: Bankless Translation: Shan Ouba, Golden Finance

Recently, stablecoins seem to have become the track with the most "product-market fit" in the crypto industry.

According to research by Artemis, Dragonfly and Castle Island Ventures, since January 2023, payment companies have completed more than US$94.2 billion in settlements through stablecoins, with monthly trading volume growing from less than US$2 billion to more than US$7.3 billion.

Despite years of solvency questions and corporate scandals surrounding Tether, it remains one of the crypto industry’s biggest success stories. USDT accounts for 62.5% of the total stablecoin supply and is deployed on more than a dozen networks (mainly Ethereum and TRON).

But surprisingly, despite all the buzz about stablecoins, there is almost no underlying chain-level infrastructure designed specifically for “giants” like USDT.

Plasma is here - a brand new blockchain built specifically for stablecoins with USDT at its core.

Just this morning, Plasma’s $500 million pre-deposit quota was snapped up instantly. Some users even paid nearly $100,000 in transaction fees to ensure they got their quota. This further suggests that Circle’s IPO may be just the “prologue” to the market’s interest in stablecoin infrastructure investments.

This article will describe how Plasma meets the market’s infrastructure needs for stablecoins, how it unifies stablecoin activities, and why its deep integration with Tether makes it unique.

Plasma Overview

Plasma is an EVM-compatible Proof-of-Stake (PoS) blockchain that is specifically optimized for stablecoin payments.

While it is not an official “Tether-only chain,” the project is backed by Tether/Bitfinex-related capital (as well as well-known investors such as Peter Thiel’s Founders Fund), forming a direct alignment of interests with the world’s largest stablecoin issuer.

Although USDT is the core, Plasma does not restrict the use of other stablecoins. In the early stage of the launch, it is planned to integrate well-known DeFi protocols including Aave, Maker, Curve, Ethena. The mainnet is expected to be launched in the second quarter of this year, when typical DeFi services such as lending and trading around stablecoins will be launched.

Plasma's architecture

The underlying layer of Plasma runs on PlasmaBFT, an improved Fast HotStuff design designed for high-throughput, low-latency stablecoin transfers - similar to Hyperliquid's consensus method. The execution layer is built on Reth, a modular Ethereum engine based on Rust that provides the full EVM compatibility mentioned above.

Plasma adopts a dual validator architecture: one validator cluster is responsible for consensus security, and the other is dedicated to handling Gas-free USDT transfers, running in a high-speed, low-cost channel. Initially, these validators will be controlled by permissions, and plans to gradually decentralize in the future.

In addition to its high speed and low cost, Plasma introduces a host of unique features in an effort to become the “best blockchain for stablecoins”:

• USDT Zero-Fee Transfers: Designed for basic USDT payments, this feature runs on a parallel block layer to avoid mainnet congestion. Users can choose to wait a little longer in exchange for fee-free transfers. Restrictions are set to prevent abuse of the system, such as requiring a minimum account balance and limiting transaction frequency.

• Custom Gas Tokens: Users can pay transaction fees with authorized tokens (such as USDT or BTC) without having to hold special Gas tokens. This allows applications built on Plasma to allow users to pay fees directly with the tokens they are familiar with. The off-chain system will automatically convert it into Plasma's native Gas token XPL at the market price, and users do not need to prepare additional transaction coins.

• Privacy transactions: The team plans to introduce the "shielded transfers" function to hide transaction details, achieve privacy protection while maintaining compliance.

• Anchored Bitcoin Security: Plasma will regularly write the latest state summary to the Bitcoin blockchain, which means that if you want to tamper with Plasma's historical data, you must rewrite Bitcoin history, which is almost impossible. Users can also stake BTC through a secure bridging mechanism, and withdrawals will be achieved through Taproot and threshold signatures without centralized custody. Although Plasma's design is inspired by the Bitcoin Rollup idea, it does not rely on future Bitcoin upgrades such as OP_CAT or Covenants that have not yet been launched, but is built on existing Bitcoin functions.

Relationship with Tether

Plasma’s relationship with Tether goes far beyond a vanilla on-chain integration.

In addition to funding support and Tether’s fee-free and whitelisted gas payment eligibility on Plasma, Plasma will also support USDT0 — a cross-chain version of Tether that can extend its influence to more ecosystems.

Plasma’s deep binding with Tether also extends to the team level. Plasma co-founder Christian Angermeyer helped Tether reinvest its huge profits into multiple industries (such as mining and artificial intelligence), further strengthening the strategic relationship between the two.

Why Tether?

So why build a blockchain around Tether?

In an interview, Plasma CEO Paul Faecks emphasized Tether’s role in providing access to U.S. dollars worldwide without relying on the infrastructure of local banking systems.

Faecks believes that what people really need is a reliable stablecoin, not USDC with an annual yield of 4%. He pointed out that while USDC is more suitable for regulated markets such as the United States and Europe, Tether has dominated countries such as Turkey, Thailand, Argentina, Nigeria, and its usage is also rapidly increasing in developed countries around the world - these places regard cryptocurrencies as "currencies" rather than intermediaries.

Tether has also recently made a big move into asset tokenization through its Hadron platform, with the goal of going far beyond gold tokens and issuing more RWAs (real world assets) in the future. Meanwhile, Plasma recently announced a partnership with Uranium Digital to bring uranium assets on-chain.

Is it worth paying attention to?

So far, public chains built for specific purposes have mostly not received widespread attention, except for individual projects (such as Hyperliquid). Plasma is also on a similar path - building a dedicated infrastructure optimized for stablecoins, rather than a general-purpose smart contract platform.

Therefore, it is worth paying close attention to how the situation will evolve and whether Plasma will become a new turning point in chain design.

The core idea of ​​Plasma is actually very simple: if stablecoins are becoming the backbone of the global financial system, then they should have infrastructure built specifically for this.