Recently, the market sentiment has been very strange. Everyone is chasing after those newly launched, overvalued so-called 'high FDV' new public chains, yet very few are willing to look back and review those old projects struggling in the mud.
I stared at the K-line chart of @Plasma for a long time. XPL has dropped nearly 90% from its peak. In this circle, a 90% drop usually means death, means the project party has run away, means the community goes to zero. But as someone who has been immersed in code and on-chain data for a few years, this crash has instead sparked an almost obsessive curiosity in me: with such large selling pressure, why are there still people using it? Why hasn't the TVL collapsed?
In the past few days, I haven't looked at the market but have reorganized their technical documentation, update logs on GitHub, and the flow of funds on-chain. I want to clarify one question: is this ultimately a dying project or a misjudged "golden pit"?
As my research deepens, I have developed some very specific, even somewhat counter-intuitive thoughts. I don't want to write a soft article like "ten reasons to recommend"; I just want to record my thought process from this past week about technology, humanity, and what we are truly pursuing in this industry.
1. The neglected "zero Gas" revolution: it's not just cheap, it's a paradigm shift.
Many public chains are shouting "low Gas," but most people—including myself—previously misunderstood the true meaning of so-called "zero Gas." We are accustomed to the logic of EVM: if you want to transfer, you need to have ETH first; if you want to interact on L2, you need to buy Gas tokens cross-chain first. This threshold actually blocks 99% of Web2 users.
I ran their Paymaster mechanism on the testnet. This is not just "free"; it is a form of underlying account abstraction logic.
When I saw the logic for stablecoin transfers in the code, I suddenly realized this solves the biggest pain point in Web3 payments. Imagine if you want to buy a cup of coffee with USDT, but your wallet doesn't have the native blockchain token for Gas, that transaction can't be sent on other chains. But in Plasma's network, the Paymaster contract can automatically handle this fee in the backend, and what the user perceives is merely "I paid, the transaction was successful."
The smoothness of this experience reminds me of the backend clearing of Visa or Mastercard. Users don't need to know how banks settle with each other; they just need to swipe their cards. Plasma's current technical architecture, especially the fee-free transfers of stablecoins achieved through Paymaster, is actually doing something very ambitious: it is trying to bridge the gap between the payment experiences of Web3 and Web2.
This is not a simple "subsidy"; this is a technical dimensionality reduction strike. While other L2s are still debating whose Gas can drop to 0.01 dollars, Plasma has directly "abstracted" this concept from the protocol layer. This is what infrastructure should look like for future mass adoption.
2. Developer inertia and EVM's "Trojan horse".
Let's talk about development tools again. I previously tried to deploy some Solidity contracts on some non-EVM new public chains, and that process was a disaster. You need to learn a new language, use a clunky IDE, and there isn't even a decent debugging tool.
But while reviewing the developer documentation of @undefined , I found that their support for Hardhat and Foundry is very deep. What does this mean? It means that an old hand who has been in the Ethereum ecosystem for several years can bring over the code with virtually no learning curve.
This "fully EVM compatible" is not just a code-level thing, but also an ecological-level "Trojan horse." Developers are lazy, and so is capital. If the cost of deploying a DeFi protocol on Plasma is extremely low while enjoying its "zero Gas" feature, why wouldn't I come?
I wonder if this is why, despite the coin price dropping so much, developers are still submitting code on it. Technology has inertia; a good developer experience (DX) can often transcend market cycles. I don't think this is a simple "compatibility"; this is a survival strategy—using lower fees and a better experience to attract developers on the shoulders of giants.
3. Leveraging Bitcoin's security: a clever "parasitic" strategy.
In terms of security architecture, I noticed an interesting design: periodically anchoring the state to the Bitcoin network.
This made me ponder. Most current Layer 2s are anchored to Ethereum, relying on Ethereum's finality. But Plasma has chosen a heavier path—leveraging the security endorsement of BTC.
From a technical perspective, this is actually a form of "dimensionality reduction strike" security strategy. The Bitcoin network is currently the most powerful, and the cost of attack is the highest on Earth. By writing the state hash into Bitcoin blocks, Plasma is essentially "engraving" its ledger history onto digital gold.
This design becomes particularly important when the coin price crashes. Why? Because when a public chain's token market cap drops by 90%, the biggest concern is network security—will validators act maliciously? Will the network be subjected to a 51% attack?
However, because of Bitcoin's status anchoring, this trust cost has been greatly shifted. Even if XPL's price drops further, as long as the Bitcoin network is still running, Plasma's historical ledger is immutable. This design might not matter in a bull market; everyone only cares about how fast TPS is; but in a bear market, when everyone is extremely sensitive about asset security, this is actually the biggest "reassurance."
4. The instinct of institutional funds: 1.1 billion dollars of TVL won't lie.
If technology is the skeleton, then capital is the blood. This is the most confusing and shocking aspect for me.
With XPL's price dropping by 90%, I checked the data from Maple Finance and found that the TVL of the SyrupUSDT lending pool actually reached 1.1 billion dollars.
I had to stop and reassess this number. 1.1 billion dollars. This is not retail money. Retail investors are all rushing to meme coins, who would put 1.1 billion dollars on a chain that looks "outdated"?
This can only be institutional funds.
The logic of institutional funds is completely different from that of retail investors. Retail investors look at K-lines, while institutions look at risk control, compliance, and the stability of returns. The data on Maple tells me that despite the secondary market selling tokens, the "smart money" in the primary market has not retreated and is even doubling down.
This made me realize that there might be a serious mismatch in the market. The coin price reflects the panic of retail investors and the selling pressure of early profit-takers, while TVL reflects institutional recognition of the underlying value of this chain (especially in stablecoin payments and lending scenarios).
This divergence is often the best entry point for value investing. What do institutions recognize? They recognize Plasma's ability to land in payment scenarios.
5. Dimensionality reduction strikes in payment scenarios: when Crypto truly enters life.
I traced their partners. Rain cards cover 150 million merchants globally, and Oobit connects to over 100 million merchants on the Visa network.
Honestly, I've seen this kind of number too many times in PPTs. But when I delved into Oobit's access method, I found this is no longer just a pie-in-the-sky idea. Coupled with Plasma's Paymaster mechanism, this means using a Web3 wallet to swipe a Visa card at Starbucks to buy coffee is not only technically feasible but might also be more advantageous in terms of rates compared to traditional channels.
And that EURØP compliant stablecoin. Connecting to euro stablecoins and complying with the MiCA (EU Crypto Asset Market Act) regulatory framework. This is too important and also too boring. Boring to the point that retail investors don't want to look at it, but for financial institutions looking to build a century-old store, this is the entry ticket.
Compliance is the biggest moat in Web3. While other public chains are still playing with various edge-ball algorithmic stablecoins, Plasma has already laid out compliant fiat channels. This means that in the future, if there is a large-scale demand for RWA (real-world asset on-chain) or cross-border payments, Plasma will be one of the very few compliant options.
This made me start to reevaluate the positioning of this project. It may not want to be the next Ethereum killer; it wants to be the Alipay of the Web3 world.
6. Facing the "elephant in the room": honest thoughts on risks and crashes.
Writing this, I must splash some cold water on myself. I cannot ignore that horrendous K-line chart just because I see the technological highlights.
XPL has indeed dropped by 90%. This fact cannot be avoided.
I analyzed the chip distribution on-chain, and the huge selling pressure mainly comes from early unlocks and the collapse of market confidence. This is the so-called "Davis double kill." Moreover, I must admit that the current validator network is still highly centralized, with the team controlling most nodes. This is original sin in the eyes of decentralized fundamentalists.
Ecological applications are indeed singular. Besides transfers and lending, I don't see too many applications of NFT, GameFi, or SocialFi. This is also why retail investors do not like to play—there's no wealth effect, no fun Dapp.
However, on second thought, isn't this where the opportunity lies?
If it were thriving now, with high coin prices and perfect decentralization, it should be in the Top 10 by market cap, not at this price.
In this market, profits come from "cognitive differences" and more from "bad news being fully priced in" afterward.
I am contemplating a concept: "golden pit".
What is a golden pit? It is when an asset's price not only falls below its value but even drops below its liquidation value.
Plasma now somewhat resembles a severely undervalued shell resource, containing a top-tier payment infrastructure (zero Gas, Paymaster, EVM compatibility), holding 1.1 billion dollars of institutional trust (Maple TVL), and containing the keys to the compliant world (MiCA, Visa network).
Yet the market prices it as if it were a worthless token about to go to zero tomorrow.
7. Conclusion: good technology does not equal good assets, unless...
Finally, I want to talk about the difference between "good technology" and "good assets."
In Web3, good technology often does not become good assets if it is not recognized by the market. But conversely, if a project with good technology has its asset price severely misjudged by the market, then its conversion potential will be astonishing.
My perspective on #plasma has changed from "why did it drop so much" to "why is it still alive and seems to be doing quite well."
Packaging the price crash as "squeezing out the bubble" sounds like a PR tactic from the project team. But if viewed without bias, the chips entering now indeed have a huge advantage over those who were standing guard at the mountain top half a year ago. This actually creates space for true builders and value investors.
The current market is filled with various overvalued narratives. AI + Crypto, DePin, various modular blockchains, each telling a 10 billion dollar story. But beyond these grand narratives, I instead see a long-lost certainty in Plasma, an old project focused on "payments" and "lending"—the unglamorous business.
This is not the thrill of a tenfold increase overnight, but a solid feeling based on logical deduction.
If Paymaster really is the standard configuration for future Web3 payments, if compliant stablecoins are the only channel for institutional entry, and if Bitcoin's security is the ultimate trust anchor—then Plasma's current price may just be the darkest, but also the cheapest moment before dawn.
I don't know where the bottom is, and I wouldn't advise anyone to go all in. But on my observation list, I have quietly moved @undefined from the "dead project" category to the "key focus: value recovery" category.
In this noisy market, independent thinking may be the only weapon we can hold.
What we want is not to hear what others say, but to see clearly what is actually happening. Technology is iterating, capital is consolidating, and bubbles are bursting.
