What is Plasma (XPL)

I. Project Introduction

1. What Is Plasma?

Plasma is a scalable Bitcoin-based payment and financial infrastructure that allows users to pay gas fees in BTC. Plasma aims to optimize the infrastructure for stablecoins, offering features such as PlasmaBFT consensus, high scalability via the Reth client, a customized gas mechanism, zero-fee USDT transfers, and privacy transactions. At its core is a Bitcoin-secured sidechain that is fully compatible with the Ethereum Virtual Machine (EVM). It not only supports USDT, but treats stablecoins as a foundational infrastructure, with the goal of building a financial network on top of Bitcoin that natively supports transactions settled by dollars.

2. How Does Plasma Work?

Architecturally, Plasma functions like a Bitcoin L2 sidechain and it is periodically anchored to the Bitcoin main chain to inherit its security and reduce trust assumptions. However, this chain is natively supportive of USDT, features built-in privacy mechanisms, and adopts a gas model that does not rely on governance tokens, enabling users to use on-chain functions without holding volatile assets. In addition, Plasma’s infrastructure plans include full AML compliance, enterprise-grade integrations, bank custody integration, and fiat off-ramp channels, so that while meeting regulatory requirements, it still supports permissionless DeFi applications. This enables Plasma to compete with traditional banking networks by offering nearly real-time and low-cost cross-border settlement.

3. Who Founded Plasma?

Founding Team:

Paul Faecks is the founder of Plasma. He previously worked at Deribit and graduated from the Technical University of Munich. Hans is the CTO of Plasma and previously served as CEO of Topl. He graduated from the University of California, Irvine and holds both a Master’s and a PhD in Computer Science from Arizona State University. Jacob Wittman is Plasma’s General Counsel. He previously worked at Pixel Vault and earned a JD from Georgetown University. Karen Shen currently leads ecosystem efforts at Plasma. She was formerly an investor of Collab+Currency and a research analyst at Messari. She graduated from Queensland University of Technology.

Funding Details:

Plasma has raised a cumulative $27.5 million, with participation from many leading institutions.

In October 2024, Plasma announced a $3.5 million fundraising round led by Bitfinex, with participation from Manifold Trading, Anthos Capital, Karatage, Split Capital, and Christian Angermayer.

In February 2025, Plasma announced a $24 million funding round led by Framework Ventures. Bitfinex continued investing in this round, and it also attracted the participation of  Paolo Ardoino, CEO of Tether and CTO of Bitfinex, as well as Mirana Ventures, Cumberland DRW, Flow Traders, Bybit, IMC Trading, Karatage, Nomura Holdings, Cobie, among others.

In May 2025, Plasma announced a strategic investment from Founders Fund, a venture capital firm co-founded by PayPal co-founder Peter Thiel. The funding amount was undisclosed. Bitfinex and Tether (specifically CTO and CEO Paolo Ardoino) also participated in this round.

4. Plasma Tokenomics

The token name is XPL with a total supply of 10,000,000,000 XPL at token generation event (TGE). Additional supply may be issued via PoS over 8 years, bringing the total potential supply to 13.15 billion XPL.

Token Distribution:

25% of the initial supply is allocated to investors. 10% is allocated to users who participate in deposit activities. 25% is reserved to incentivize existing and future service providers. The remaining 40% is designated for the strategic growth plan to expand Plasma’s utility, liquidity, and institutional adoption. Of that 40%: 8% will be unlocked immediately at Plasma's mainnet beta launch for use in DeFi incentive programs with strategic partners to meet liquidity needs, support exchange integration, and promote early-stage ecosystem growth. The remaining 32 % (3,200,000,000 XPL) will be unlocked linearly on a monthly basis over the following three years, ensuring that by the third anniversary of the mainnet beta launch, 100% of the Ecosystem and Growth allocation is unlocked.

5. Timeline of Key Milestones

In 2025, Plasma has engaged in integration talks with multiple DeFi projects such as Curve, Maker, Aave, and Morpho, with the aim of providing users with services including stablecoin swaps, lending, and yield farming. Meanwhile, Yellow Card, Africa’s largest stablecoin infrastructure provider, will leverage Plasma’s free USDT transfers to help merchants handle peer-to-peer payments. In addition, smart contracts will support micro-payment use cases based on stablecoins, such as installment payments and subscription billing.

II. Token Information

III. Related Links