What is Plasma (XPL)?
Everyone uses stablecoins, right? It would be great if we could transfer USDT for free and move it around without worrying about gas fees.
Plasma is a Layer 1 blockchain specifically designed to support stablecoin payments, featuring zero-fee USDT transfers, high transaction finality, high throughput, and EVM compatibility, allowing developers to easily deploy Ethereum smart contracts.
How Plasma Works
1. PlasmaBFT Consensus
Plasma uses PlasmaBFT to secure the network, developed from the Fast HotStuff Byzantine Fault Tolerant (BFT) protocol. HotStuff is a modern consensus mechanism that keeps blockchains secure even if some nodes behave incorrectly or maliciously.
The Fast version reduces communication between validators, improving efficiency. PlasmaBFT extends this concept by executing steps such as proposing, voting, and confirming blocks in parallel, increasing block production speed and allowing transactions to finalize within seconds.
2. EVM Execution Layer
Plasma’s execution layer runs on Reth, an Ethereum client written in Rust. PlasmaBFT handles block sequencing and transaction finality, while Reth processes transactions, state changes, and EVM logic. This makes Plasma fully EVM compatible, enabling developers to use Solidity smart contracts and existing Ethereum tools without modification.
Key Features of Plasma
Zero-fee USDT Transfers
Plasma supports USDT transfers without gas fees through a Paymaster managed by the Plasma Foundation, which covers standard gas costs. Eligibility checks and usage limits prevent abuse. Fees are paid from a dedicated XPL quota, allowing apps to offer free USDT transfers. This feature applies only to basic USDT transfers; other transactions still require XPL to maintain validator incentives and network security.
Custom Gas Tokens
Plasma has a Paymaster Smart Contract that allows applications to support any ERC-20 token as gas, such as stablecoins or ecosystem tokens. Developers can register tokens for gas, and users can pay fees with tokens they already hold, like USDT, without needing a separate XPL balance. The Paymaster is secured and audited by the protocol and charges no additional fees, making the user experience smoother and suitable for high-volume payment apps or DeFi.
Confidential Payments
The Confidential Payments module is under development to provide privacy for stablecoin transactions like USDT, allowing users to hide transaction details such as amounts and recipients. It remains compatible with existing wallets and DApps. As of September 2025, this module is still under research, exploring multiple privacy approaches to reach high standards.
Bitcoin Bridge
Plasma allows users to bring BTC into the EVM system directly without relying on custodians or wrapped tokens. In short deposit BTC independent verifiers confirm system mints pBTC, 1:1 backed by BTC.
pBTC can be used in smart contracts, as collateral, or cross-chain via LayerZero OFT. When withdrawing BTC, pBTC is burned, and the BTC is released securely using a Threshold Signature Scheme.
XPL Token
XPL is the native token of Plasma, used to power the network. It is used for gas fees, securing the network by staking XPL as a validator, and rewarding validators for network support. Misbehaving validators are penalized via reward slashing, not stake slashing. XPL holders can also delegate tokens to validators to earn rewards without running their own node.
Token Distribution
Public Sale: 68%
Funding Rounds: 32%
Maximum supply is unlimited, with 10 billion XPL unlocked and a current circulating supply of 1.8 billion XPL.
Summary
Plasma is a Layer 1 blockchain built to make stablecoin payments faster and cheaper. With features like zero-fee USDT transfers, support for custom gas tokens, and a secure, custodian-free Bitcoin bridge, Plasma enables stablecoins to move seamlessly at scale. While its primary focus is on everyday payments, the same architecture can support cross-border remittances and DeFi protocols.