Before the mainnet launch, Plasma had already secured a significant revenue partnership with Binance. Through this partnership, users can deposit funds directly from Plasma to Aave through Binance's platform. Relying solely on native crypto users is not a sustainable model. We need to drive genuine organic adoption and not rely solely on incentives to attract users; we need to ensure the platform itself is engaging and meets real user needs. Plasma has always envisioned itself as a community-driven project. Paul Faecks believes that all decisions regarding token allocation and distribution are driven by this philosophy, aiming to align the ecosystem more closely with community needs. Stablecoins are at the beginning of a turning point for the industry. Currently, the total amount of stablecoins in circulation is approximately $260 billion to $270 billion, and Plasma believes this market will eventually reach trillions. Paul Faecks believes that dedicated stablecoin chains will emerge in the future, with a total stablecoin volume of hundreds of billions of dollars and daily trading volumes potentially reaching trillions of dollars. Stablecoins have become a core strategic tool for global US dollar monetary policy because they attract buyers with unconstrained preferences for debt prices. The entire XPL system is designed to be closely aligned with the interests of the community while ensuring that the XPL token plays a core role in the ecosystem. Plasma's vision is clear: global commerce will gradually shift to stablecoins, and Plasma will be a key driver of this transformation. Plasma was built with the USDT ecosystem in mind. While Plasma enables a multi-stablecoin world, Tether's market dominance and widespread distribution network are extremely difficult to replicate. Reflections on the XPL Launch Andy: Paul, tell us about the past few days. How have things been? Paul: It's been a really intense week. We've been busy all week because launching a blockchain is more than just opening a network. There are many dynamics involved, including external variables that are beyond our control. So, it's been a really stressful week. So far, though, everything's been going really well, and we're really happy. However, everyone was definitely exhausted last night. Robbie: So what did you find to be the hardest part? Does it seem like the hardest part is over now? Paul: Not at all. I think the real challenge lies ahead. We just announced the Plasma One product, and that's obviously just part of the work before launching the chain. I think this is where we're really starting to build out our vision. While the chain itself, the DeFi ecosystem, and the exchange component are all important, there's still a lot of work to be done. Andy: Now, we'd like to hear about your future vision, such as how you plan to develop your product pipeline and where you see the chain going. Clearly, Plasma has attracted a lot of activity and attention due to the pre-deposit mechanism. Before we dive into the future, I have a question: Why did you decide to use a mechanism where you could receive an XPL token airdrop for pre-depositing USDT? For example, this feature, which distributes XPL tokens to users who deposit early, has already sparked a lot of excitement online. Some people even say that if you invest $1 in the chain, you could potentially get $10,000 in returns. Of course, not everyone can actually operate at this rate, but many users do benefit from it. I think you've managed to avoid some of the negative buzz that can often accompany similar mechanisms. How did you achieve this? Why did you choose this approach to reward the Plasma community and the Plasma Collective? What's the logic behind this design? Paul: I think it's very consistent with how we operate. For example, we set very clear and transparent parameters for our public sale, allowing anyone to participate. This is very important to us because we want to enter the market in an open way that allows as many people as possible to participate. Furthermore, Nathan is responsible for the stablecoin collective. He's done an excellent job there, achieving impressive results. At the same time, I think we've always wanted to make this a large-scale, community-driven collaboration. Especially for stablecoins, we want users to not only want to use it, but also truly enjoy it. Only by promoting it from the grassroots level can stablecoins truly take off and demonstrate their value. I believe that our decisions regarding token allocation and distribution are largely guided by this philosophy, aiming to better align the entire ecosystem with community needs. Yield Sustainability on Plasma Yield Sustainability on Plasma Andy: Let's talk about some of the current on-chain developments. For example, Aave and Ethena's USDE offer very attractive yields, along with recurring operations and XPL rewards. These are attracting a lot of users. So, what is the best way to earn yield on Plasma right now? How is the overall ecosystem performing? How do you view the sustainability of the yield model associated with XPL token rewards? How do you hope to transform this yield model into one that attracts long-term community participants, rather than a simple "farm and dump" phenomenon? Can you elaborate on your strategy and vision? Paul: Absolutely. That's a very good question. I believe there are indeed many examples of projects with high TVL (total value locked) that ultimately failed to achieve substantial progress due to a lack of real-world use cases. We are very aware of this complexity. For us, we have always believed that distribution is key to ensuring network value. As a stablecoin network, you need as many nodes as possible to join to increase the value of the entire network. One point that may be overlooked is that before the mainnet launch, we had already reached a major revenue partnership with Binance. Through this partnership, users can deposit Plasma tokens directly into Aave through Binance's platform. Considering that Binance has 280 million users, this is a huge breakthrough for us. Therefore, our overall goal is to achieve a larger token distribution through this partnership, making the on-chain money market accessible to anyone who sees its value. Of course, relying solely on the native crypto user base is not a sustainable model. Such user bases are often short-lived and subject to high market volatility. Therefore, our strategy can't just revolve around these users, but needs to expand to a wider audience. Returning to your question about the sustainability of Plasma DeFi, I think a key point is that we need to drive genuine organic usage. By "organic usage," I mean users using our platform based on actual needs, not just incentives. In other words, we can't just rely on incentives to attract users; we need to ensure the platform itself is engaging and meets real user needs. I think we've made some progress on this front, and we'll continue to focus on this going forward. Replicating Plasma's Success Robbie: Your team does have a unique advantage. Typically, blockchain projects launch their tokens after the mainnet launch and begin planning their ecosystems and attracting liquidity through tokens. But you've already achieved these goals before the token launch. This makes me curious: what's unique about you that other teams don't have? Paul: We have the best team. Robbie: Do you think other teams will try to copy your approach but ultimately fail because they can't build a team like yours? Paul: Yes, I hope so. But if they don't, I might need to have some specific conversations with them. Ultimately, though, I truly believe we have an exceptional team. I truly believe that having such a smart, long-term team is our greatest strength. They're not only capable, but also truly committed to creating something valuable, which is any company's most valuable asset. Stablecoins are a turning point for the industry. Andy: I spoke with Jeremy Elair last week about how other teams can participate in this space. He shared Circle's perspective on Arc and their chain, as well as Broads' USDC distribution strategy. There are other competitors, like Stripe, Circle, and Tether, all trying to build a global stablecoin transfer network. When we think of competitors, we often think of large payment processors like Visa. These companies have market capitalizations exceeding $50 billion and process trillions of transactions daily. I've discussed this with Jeremy, and he believes USDC's goal is to be as ubiquitous as Netflix, with USDC available on smart TVs, smartphones, and even refrigerators. I think Paul shares a similar philosophy, and he's already successfully executing on it globally. When talking about Arc and Chain, he sees them as the natural evolution of Web 2.0 technologies. For example, you can use Google Chrome on an Apple computer, stream content on an Apple TV or iPad, watch shows on an LG or Samsung TV, and even use Apple products on a Google Chromebook. This convergence of technology stacks is exactly what we're discussing. He's very focused on the concept of "expanding the pie" rather than fighting for existing market share. So, I'd like to ask you a question. In the competitive landscape of stablecoin chains, especially with Plasma as the leader and first-to-market project, what do you see as your advantages? In terms of "expanding the pie," what significant contributions do you think Plasma can make to the industry? Paul: I believe stablecoins are at the beginning of a turning point for the industry. Currently, there are approximately $260 billion to $270 billion in stablecoins in circulation, and we believe the market will eventually reach trillions. Many predict that stablecoins will grow far faster than in the past, which gives us great anticipation for the future. Looking back on our journey, the initial question we faced wasn't how to compete with payment giants like Stripe, but whether what we were doing truly made sense. Why do stablecoins need a dedicated chain? Why can't we just use Ethereum? Over time, the market demand for a stablecoin chain has become increasingly apparent, which is encouraging because it reflects the real needs of the industry. We do compete with payment giants like Stripe, but our goals and strategies differ. For example, we're not directly competing with Temple. We believe winning the battle for "scale" in the industry is key. No project has truly won in this area yet, including Ethereum and Tron. I believe the definition of "scale" will change over the next two to five years. I believe dedicated stablecoin chains will emerge, with a total stablecoin supply reaching hundreds of billions of dollars and potentially trillions of dollars in daily transactions. This is the future we're striving to build. Therefore, we don't pay much attention to smaller competitors like Temple or Codex. While I have great respect for these teams, and they're pursuing their own goals, our focus is on a much grander scale. The Impact of a Saturated Stablecoin Market Robbie: Another notable change is the market's acceptance of stablecoins. There's now a consensus that the number of stablecoins in circulation will reach trillions. This is not only a result of market development, but also a component of US government financing. Stablecoin companies are being used as a vehicle for issuing debt, further fueling the growth of stablecoins. I'm curious about the impact on the industry when the stablecoin ecosystem reaches trillion-dollar scale. People like Arthur Hayes believe that the growth of stablecoins will provide significant leverage for DeFi applications. But more specifically, considering some DeFi applications on Plasma and the shifts in market competitive forces you've observed, how do you envision the industry landscape evolving? What are the milestones between now and reaching trillion-dollar scale? How do you envision this transition from today to the future? Paul: This is a very complex question, involving multiple layers of change. But I firmly believe the future you describe is achievable. I believe the journey to achieve this goal will be complex, especially in the United States, where the strategic importance of stablecoins is increasingly recognized. Scott Bessent has mentioned that stablecoins have become a core strategic tool for global dollar monetary policy because they attract buyers with unconstrained preferences for debt prices. While this may sound like conspiracy theory, it actually reflects reality. Stablecoins do solve many problems and offer tremendous potential for development in many areas. Robbie: The market seems to have accepted this view. More specifically, how will stablecoins impact the blockchain landscape as they further integrate with other systems? Paul: I believe the boundaries between on-chain and off-chain will blur in the future. Institutional entry into crypto and the definition of front-end and back-end for DeFi have been hot topics over the past few years, but only recently have they truly begun to converge. The two are converging in very real ways. Our current clients are already using solutions that connect on-chain and off-chain products. I believe more similar products will emerge in the future, supporting centralized user interfaces with on-chain processes. This integration of on-chain and off-chain will be a key direction for the industry's development, and it's a key focus for us at Plasma. Andy: I completely agree with you. This is likely one of the reasons you're focusing on Plasma One product development, right? Because stablecoins have very important use cases in cross-border payments, serving the unbanked, and helping people access strong US dollars when they need them most. These are exactly the goals that cryptocurrency promised in 2017, and now crypto is regrouping around these use cases. Paul: I believe one of the core values of cryptocurrency is permissionless money. It's a very important concept. While it's taken longer than many expected, it's now becoming a reality. Andy: So, let's talk about the PlasmaOne application and the vision for Neo Bank. Looking ahead five years, what headlines do you hope to see about Plasma One applications? What is your vision for this application? How do you plan to execute it? Paul: I believe stablecoins, as core infrastructure, are the perfect technology stack for building concrete consumer-facing products. On the one hand, they can serve as an entry point for distribution; on the other, they can significantly enhance the user experience of financial instruments. As a long-time stablecoin user, I live in an environment with a robust banking system and access to excellent fintech products. However, I understand that this isn't the case in most other parts of the world. Therefore, I believe that products built on stablecoins can provide users with a superior experience compared to the traditional banking system. This is precisely why we developed Plasma One, and it's also to showcase the potential of stablecoins. We're working with many excellent companies who are also building on Plasma, and we're open to these collaborations, as they clearly have tremendous value. Plasma is a great example of how stablecoins can serve as the foundation for building truly amazing products. Plasma Distribution Strategy Robbie: Could you elaborate on the core principles of your distribution strategy? I generally understand the concept, but your explanation has given me a new perspective. Could you further explain the specifics of this strategy and how you apply it in practice? Paul: Absolutely. Our goal is to build a stable and efficient ecosystem, and the key to this is leveraging network effects. To achieve this, we need to ensure that Plasma's applications reach the broadest possible user base, from B2B to B2C. Simply put, our goal is to enable end users to truly engage with and utilize Plasma's capabilities. This is crucial. In fact, this is where Tron excels in the industry: they have strong capabilities in stablecoin distribution and user engagement. This is why we prioritize this aspect. To advance this goal, we need to develop concrete applications that truly demonstrate Plasma's potential, and Plasma One is one of the core products we're building to achieve this. Andy: From theory to practice, the Plasma chain's user experience seems more user-friendly than traditional cryptocurrency systems. For example, when considering the user base for Plasma One applications, markets like Turkey, Syria, Brazil, and Argentina come to mind. Users in these regions are often the primary target audience for stablecoins like USDT. They generally don't want to deal with complex seed phrases or cumbersome authorization processes. They want free transfers and a way to easily and securely send funds to their families. At the same time, these users also want privacy and the ability to withdraw funds if necessary. While I understand that blockchains are designed differently from traditional payment systems, traditional payment methods do have some advantages. Do you consider user experience to be an important consideration in Plasma chain design? Will these needs be specifically addressed in the design of the Plasma One application? Paul: 100% yes, absolutely. This is a fantastic pitch for Plasma One, and I fully support it. Andy: I've noticed that Visa's market cap is roughly between $50 billion and $60 billion, and other companies processing trillions of dollars in payments are also in that range. A lot of attention is being paid to how the XPL token will accrue value and whether it can play a positive role within the Plasma network. Currently, there's a lot of excitement around the revenue and token buyback model, but that's likely a short-term phenomenon. However, the crypto ecosystem is continuing to grow, and I think that's a positive trend. How do you think XPL can become a sustainable asset? For those looking to compare XPL to Circle or other publicly traded companies, is XPL the best way to gain exposure to the stablecoin market? How will you make this vision a reality for XPL holders? What would you like to say to them today? Paul: Of course I can share. I think this is something our team has been thinking deeply about. The XPL token must play a very core role in the Plasma ecosystem. We want to avoid a "fragmented chaos" where many different entities accrue value independently without a clear system, which is ultimately unsustainable. We did face a number of complexities when designing XPL's value accumulation mechanism, and it's something we've spent a lot of time researching. We'll elaborate on the details publicly in the future. While it's difficult to give a simple and direct answer right now, I can confirm that our entire system is designed with the interests of the community in mind. We will continue to move forward in this direction while ensuring that the XPL token plays a core role in the ecosystem. Plasma and Tether Partnership Andy: Tether's co-founder once mentioned in an interview that his mission is to take startups from 0 to 1. Citing Peter Thiel's book, he argued that Tether is no longer a startup. So, in terms of its growth from 0 to 100, where is Tether currently? His response: "I believe we're still at 0.25. From here, our potential growth is limitless. Through innovation, we still have many areas to disrupt and much to build. Once people understand the true strategy behind every thoughtful action we take every day, they will realize the true potential of this company." He defined Tether as a "once-in-a-century company." Furthermore, Tether is seeking to raise $2 billion at a $500 billion valuation, and the CFTC has approved the stablecoin for settlement in traditional US derivatives markets. So, how important is Tether to the future of Plasma? Perhaps this question is a bit simplistic. Also, does your partnership with Paolo on promoting stablecoins have a significant impact on policymakers, like the White House? What does this mean for Plasma? Paul: First, if Tether is at 0.25 right now, I'd argue Plasma is probably still at 0.01, and we still have a lot of work to do. While it sounds like a long shot, I think this is a promising start. The Tether team has built a truly groundbreaking company and has achieved remarkable success through long-term strategic decisions. This is something we at Plasma hope to emulate. USDT has been incredibly successful in the stablecoin space. While I may be biased, I do believe this is true. Therefore, we've been building Plasma with the USDT ecosystem in mind. While we support a multi-stablecoin world, Tether's market dominance and broad distribution network are very difficult to replicate. Therefore, we have great respect for Tether and have thoroughly enjoyed working with them. I have the utmost respect for Paolo and the entire team. Robbie: Given how rapidly the crypto industry evolves, the successful launch of Plasma may introduce some people to the project for the first time. What's the most important piece of information you want them to know for these new users, and where can they go to learn more? Paul: You can learn more by visiting our website at plasma.to. I want everyone to know that our goal is to be a leader in the stablecoin space. I believe stablecoins will become one of the largest financial markets in the world. Simply put, the growth of the global economy represents an opportunity for stablecoins, and we want to be a part of this enormous market. Our vision is clear: global commerce will gradually shift to stablecoins, and Plasma will be a key driver of this transformation.
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