The native utility and governance token of the ecosystem is XPL, with a total supply capped at 10 billion tokens and a current circulating supply of approximately 1.8 billion. XPL @Plasma serves several critical functions:
Staking and Security: Validators stake XPL to secure the network and participate in the Proof-of-Stake consensus mechanism, earning XPL rewards in return.
Governance: $XPL holders have the power to vote on key protocol upgrades, parameter changes, and the direction of the project's treasury.
Gas Fees: For operations beyond simple USD₮ transfers, XPL is used to cover transaction fees. A portion of these fees is then burned, a mechanism inspired by Ethereum's EIP-1559, which exerts deflationary pressure on the token supply to offset the issuance of rewards to validators.
