Most blockchains today are trapped in the ambition to be multi-purpose platforms, ultimately sacrificing efficiency.
As a result, stablecoin transactions, which should be the backbone of cross-border payments, are often hampered by soaring gas fees and severe network congestion.
Ironically, the assets most frequently used for value transfers must compete for space with thousands of other applications on the same network.
To address this challenge, Plasma exists as a Layer 1 blockchain specifically designed to bridge the needs of stablecoins.
However, it is important to note that Plasma is not an exchange, trading platform, or marketplace for buying and selling crypto assets.
It is also important to understand that this article is solely intended as an educational tool to dissect the technical concepts and role of Plasma (XPL) Coin in strengthening the infrastructure of the blockchain ecosystem.
What is Plasma (XPL) Coin?
Plasma (XPL) Coin Apa yang Membuat Blockchain Ini Berbeda dari yang Lain 2
Plasma is a Layer 1 blockchain designed with a primary focus on stablecoin transactions.
This network was built to move stable assets, such as USDT, efficiently and predictably, making it more suitable for payments and remittances than speculative crypto activities.
From the outset, Plasma was not positioned as a general-purpose blockchain, but rather as a dedicated infrastructure to support the use of stablecoins in real-world transaction scenarios.
XPL, within the Plasma ecosystem, serves as the native token that underpins the network’s operations. Its role is primarily in technical aspects, including network security, validator incentives, and protocol governance mechanisms.
XPL was also not designed as a primary payment tool for end users, but rather as an internal component that ensures the network’s stability and sustainability.
Functionally, Plasma positions itself as a blockchain-based payment infrastructure. Its primary focus is to provide a fast and efficient path for transferring value for stablecoins, not to build a speculative financial ecosystem.
Plasma does not provide trading services, does not act as an exchange, and does not offer crypto investment products.
With these limitations, Plasma emphasizes its role as a technology layer supporting digital payment activities, not as a platform for buying and selling crypto assets or as an investment vehicle.
Why Do Stablecoins Need a Dedicated Blockchain?
Stablecoins are widely used for value transfers and payments because they offer price stability.
However, most stablecoins still rely on general-purpose blockchains that must handle multiple activities simultaneously.
This situation means that these networks are not yet fully optimized to handle the large volume of stablecoin transactions.
As a result, transaction fees and confirmation times often become a bottleneck, especially when the network experiences congestion.
Transfers that should be fast and efficient can become expensive or delayed, reducing the effectiveness of stablecoins as a means of payment.
These limitations have led to a natural transition to blockchains specifically designed for stablecoins.
The focus is on providing a more efficient, consistent infrastructure that aligns with the role of stablecoins as a medium for value transfer and digital payments
Plasma’s Focus on Stablecoin Infrastructure
Plasma was built on the assumption that stablecoins are the network’s primary use case. From the design stage, stablecoin transactions were placed at the core of the system, not simply an added feature among other functions.
This approach led Plasma to optimize the network specifically for stablecoin transfers, with a primary focus on smooth processing, efficient fees, and fast and certain transaction finality.
Stablecoins are treated as a means of transferring value that must perform consistently, both for everyday use and at scale.
This orientation distinguishes Plasma from general-purpose blockchains that serve multiple needs simultaneously.
On mainstream networks, stablecoins often have to share capacity with other activities, whereas Plasma focuses its entire infrastructure design on optimally supporting stablecoin transactions.
How Stablecoin Transfers Work on the Plasma Network
Plasma is designed to keep the stablecoin transfer process simple and easy to understand without burdening users with complex technical details. Here’s how stablecoin transfers work on the network.
1. Transaction Fee Abstraction Concept
In simple stablecoin transfers, users don’t always need to own XPL tokens. Transaction fees are structured to be more streamlined for end-users, including the possibility of paying directly with stablecoins.
This approach reduces friction and makes the transfer process more convenient.
2. Fast Transaction Settlement
The Plasma network is optimized to achieve transaction finality in a short time. This design ensures that stablecoin transfers can be processed quickly and reliably, making it suitable for cross-border payments and fund transfers.
General Plasma Blockchain Architecture
Architecturally, Plasma is built to balance stablecoin transaction efficiency with network security, without sacrificing ease of integration with existing ecosystems. The general architecture is as follows:
1. PlasmaBFT Consensus
Plasma uses the PlasmaBFT consensus mechanism, designed for high throughput.
This approach enables the network to process large volumes of transactions stably while maintaining data security and consistency within the network.
2. EVM Compatibility
Plasma is compatible with the Ethereum Virtual Machine (EVM), allowing developers to build and run Ethereum-based applications on top of this network.
This compatibility simplifies integration with the growing Web3 ecosystem, without having to start from scratch.
3. Bitcoin Security Integration
To strengthen security, Plasma connects its network to Bitcoin through a bridge mechanism. This approach combines the adaptability of modern blockchains with Bitcoin’s high level of security.
The Role of XPL Coin in the Plasma Network
XPL is a native token that functions as an internal component in the operation of the Plasma network.
Its role is not positioned as a promotional asset or investment vehicle, but rather as part of the mechanisms that keep the network running stably.
In terms of security, XPL is used for staking by validators who participate in securing the network.
This mechanism helps ensure that the transaction validation process runs according to the rules and encourages behavior that aligns with the network’s interests.
XPL also plays a role in protocol governance. Token holders can participate in the decision-making process regarding network changes or developments, so that the direction of Plasma’s evolution is not entirely centralized in the hands of a single party.
Furthermore, XPL is also used in more complex transactions and network activities, particularly those related to technical and operational functions at the protocol level.
With these functions, XPL acts as part of the Plasma infrastructure, not as a speculative instrument or crypto investment product.
What Makes Plasma Different from Other Blockchains
places stablecoins as its primary focus, with an orientation toward value transfer and digital payments.
This approach distinguishes it from general-purpose blockchains that must serve multiple functions simultaneously within a single network.
Within this ecosystem, XPL serves as a token supporting network operations, particularly for security and governance, rather than as a speculative tool.
With this position, Plasma can be understood as part of an experiment in the evolution of digital payment infrastructure. This network offers a specialized approach to stablecoins, but it is not a single solution for all blockchain needs.
In addition to gaining in-depth insights through various popular crypto education articles, you can also broaden your horizons through a collection of tutorials and choose from a variety of popular articles that suit your interests.
Besides updating your knowledge, you can also directly monitor digital asset prices on Indodax Market and stay up-to-date with the latest crypto news. For a more personalized trading experience, explore Indodax’s OTC trading service. Don’t forget to activate notifications so you don’t miss out on important information about blockchain, crypto assets, and other trading opportunities.
