How Plasma Becomes the Chrome of Stablecoin Infrastructure

Author: Ryan Yoon, Source: Tiger Research, Compiled by Shaw Jinse Finance

1. Do You Really Understand Stablecoins?

Global interest in stablecoins is growing. However, many people remain unclear about the differences between stablecoins and traditional digital payment methods. This is partly because digital financial systems are already well-established. Credit cards and mobile wallets have long been used as a means of conducting digital transactions. Against this backdrop, a question arises: Do we really understand stablecoins? Stablecoins are digital assets pegged to fiat currencies like the US dollar, designed to maintain price stability. Their primary difference is their reliance on blockchain rather than traditional financial infrastructure. Blockchain technology enables peer-to-peer transactions, eliminating the need for intermediaries like banks, payment processors, or card networks. In a fiat-based system, banks, credit card companies, and remittance providers act as multiple intermediaries. Each additional layer of intermediary introduces delays and higher costs. Cross-border remittances often take days or even weeks to complete and are subject to significant fees. Transactions are also restricted by banking hours and cannot be processed on weekends or holidays. Stablecoins eliminate these frictions by connecting users directly through blockchain networks. No approvals or permissions are required. Money can be transferred instantly, anytime, anywhere, with an internet connection. Functionally, this is similar to the delivery of physical cash, but in a digital, borderless form. These attributes translate into four core values: permissionless access supports global financial inclusion; programmability automates financial processes; low cost improves efficiency; and high speed enables a real-time global settlement infrastructure. For example, a freelancer in Argentina can open a digital wallet to store US dollars without bank approval. Smart contracts enable automatic monthly deposits, reducing currency exchange costs from $10 to $0.10. Within seconds of receiving a payment, earnings are converted into stable dollars, protected from inflation. Together, these applications demonstrate how stablecoins can transcend the boundaries of traditional finance. They offer new ways to save, spend, transfer money, and earn money. However, the barrier to adoption remains high. Users must navigate multiple blockchains, manage wallet addresses, protect private keys, and transfer assets. Each of these tasks requires technical expertise that most users lack. To fully realize the potential of stablecoins, streamlining the infrastructure is crucial. Just as Google Chrome simplified web access, stablecoins require a similar underlying service to achieve widespread usability. 2. Plasma as the “Chrome” of Stablecoins Internet Explorer (IE) drove widespread web access, but despite initially capturing 95% of the market share, it still suffered from slow speeds, poor security, and poor standards support. With no viable alternatives at the time, users were left with complex plugin installations, frequent crashes, and slow performance. In 2008, Google Chrome changed everything. Its performance improved nearly tenfold, and it adopted a multi-process architecture to ensure stability. Automatic updates enhanced security. Complex technology disappeared behind the browser, giving users a fast and reliable web experience. Within five years, Chrome surpassed Internet Explorer to become the global leader. The stablecoin market faces a similar dilemma. Existing blockchains support stablecoins, but like Internet Explorer, they have failed to realize their full potential. High fees, complex processes, and frequent network congestion have become an unavoidable reality for users.

Plasma, as a high-performance Layer-1 blockchain dedicated to stablecoins, is entering this field. Just as Chrome redefined the web browser, Plasma is also committed to redefining the stablecoin infrastructure.

2.1. PlasmaBFT

Traditional blockchains typically take minutes or even hours to finalize transactions. On Ethereum, sending USDT during periods of network congestion can experience long delays.Plasma fundamentally solves this problem. With its new consensus mechanism, PlasmaBFT, transactions can be finalized in under a second.

The Fast HotStuff algorithm accelerates consensus. In short, it ensures consensus among participants in fewer steps. Multi-node signatures are aggregated, simplifying the verification process. The number of messages exchanged at each step is also reduced. New block proposals can be initiated without waiting for the completion of previous blocks. As a result, overall throughput is improved. Under optimal conditions, finality can be achieved with only two consecutive proofs. A comparison with browsers is instructive. In Internet Explorer, a stuck tab can crash the entire application. Chrome solves this problem by using a separate process for each tab, enhancing stability. Similarly, Plasma optimizes transaction processing, improving overall network stability. 2.2. EVM Compatibility For developers, the most critical factor is the ability to use existing knowledge and tools without modification. Chrome fully supports web standards, freeing developers from the compatibility issues of Internet Explorer. Similarly, Plasma supports all Ethereum applications and tools without requiring code changes. Developers can work in a familiar environment. Plasma is built on Reth, a high-performance Ethereum client written in Rust, and is fully EVM-compatible. Smart contracts can be migrated to Plasma without any code changes, eliminating a major barrier to entry. The analogy is clear with browsers. When a user migrates from IE to Chrome, websites continue to function without adjustments. Similarly, Plasma seamlessly integrates with the existing Ethereum ecosystem. 2.3 Native Bitcoin Bridge Plasma is developing a Bitcoin bridge in parallel with its stablecoin infrastructure. The initiative has two primary goals: issuing Bitcoin-collateralized stablecoins and building a Bitcoin-centric financial ecosystem. In a stablecoin system, the reliability of the collateralized asset is crucial. Bitcoin, with 15 years of proven experience, is currently the most secure digital asset. However, its lack of native smart contract functionality limits its use as direct collateral. Traditionally, centralized custodians hold Bitcoin and issue wrapped tokens. This model introduces two long-standing issues: a single point of failure and high transaction costs. Plasma's native bridge addresses these limitations by allowing Bitcoin to be transferred directly into the EVM environment, where it can function as programmable collateral. This approach preserves Bitcoin's security while expanding its role in financial applications. It also integrates Bitcoin into the DeFi ecosystem, allowing users to hold Bitcoin and trade it with stablecoins like USDT, thereby promoting the development of a Bitcoin-powered financial environment. 2.4 Zero-Fee USDT Transfers Zero-fee USDT transfers are a core feature of Plasma as a stablecoin infrastructure. Just as Chrome revolutionized the browser market with free access, Plasma is committed to driving stablecoin adoption through free transfers. Users simply need to hold USDT. Transaction fees are covered by a system-wide payer. This only applies to transfers of the official USDT token. Basic identity verification and transfer limits prevent abuse. In fact, the Plasma Foundation allocates a fee budget to cover transaction fees. Users can simply use USDT for all transactions, paying no fees. 2.5 Custom Fee Tokens Traditional blockchains restrict fees to their 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 with familiar assets like USDT or BTC. They choose a token from an approved list, and a trusted oracle sets the fee based on real-time exchange rates. 2.6 Confidential Payments One of the core characteristics of blockchain is transaction transparency. Anyone can view transaction amounts, senders, and receivers. While this ensures openness, it also limits privacy. In contrast, traditional finance, while protecting privacy, relies on regulation. Plasma is developing a confidential payment module that can be selectively applied. Much like Chrome's choice between normal and incognito modes, transactions can be kept public or private depending on the situation. Technically, the recipient's identity is hidden using a one-time address, and transaction details are encrypted in a memo. The system runs in the EVM environment, ensuring compatibility with DeFi. Importantly, regulators can still access this information when needed for anti-money laundering or tax compliance. This balance protects privacy without sacrificing regulatory standards. Plasma is currently garnering significant market attention. The XPL token sale concluded in minutes. The Binance Earn campaign reached $1 billion before its swift conclusion, attracting over 30,000 participants. However, sustained growth requires more than just technological advancements; a more comprehensive strategic approach is essential. Chrome's success offers a valuable lesson. Initially, it attracted users with its exceptional speed and performance. However, its true growth engine is its extension ecosystem. Everyday tools like MetaMask and DeepL run seamlessly on Chrome, transforming it from a browser into a digital platform. Plasma is following a similar trajectory. Currently, it is focused on building core infrastructure ahead of its mainnet launch. Zero-fee transfers and EVM compatibility rival Chrome's speed advantage. However, the crucial phase is yet to come. Plasma understands the importance of ecosystem development. Its partnerships with popular DeFi protocols like AAVE, Pendle, and Ethena demonstrate this commitment. Through its Community Builder Program, Plasma is actively recruiting developers. These early investments lay the foundation for a diverse range of services, much like Chrome's extension ecosystem. The real potential lies in unlocking new service areas. High fees have previously hindered the realization of use cases like microcredit, real-time payroll, and micropayment-based content services. With Plasma, these use cases will become economically viable. With the emergence of such services, Plasma's utility and user base will expand significantly.

Plasma's ultimate goal is to achieve the same transformation that Chrome brought to the internet. Complex technology is hidden, and users experience simple and intuitive features. For stablecoins to develop into true digital currencies, usability, not technical complexity, is the key.

Plasma is targeting this point, striving to become the "Chrome of stablecoins."