2025 will go down in history as the year of the crypto breakthrough. Fintechs, TradFi, and governments are all embracing stablecoins. In just the past 18 days: • @Stripe launched a stablecoin-focused platform • @MoneyGram launched an on/off-ramp platform • @Visa invested in @BVNKFinance • @Mastercard launched a stablecoin-linked card • @visa launched a stablecoin-linked card • @MoonPay and @Mastercard partnered up However, despite the sharp growth of these past months, stablecoins still account for "only" 1.09% of the USD M2 money supply. As regulatory frameworks evolve and support for digital assets strengthens, it's a matter of time before this number reaches the trillions. Therefore, an increasing amount of startups are positioning themselves in this vertical to ride the upcoming giant wave. In this sixth part of the RWA-centric chain series, we will focus on one in particular: @PlasmaFDN With stablecoin regulations underway, the sector booming, and Tether holding a 63% market share, Plasma is well positioned to find PMF quickly. The company has several goals, but the most important ones are: • Taking USDT market share from Ethereum and Tron • Capturing a significant share of global daily settlement volume But as always, let’s dive into the tech to get a better idea of how the team plans to make this happen. ⚙️ THE TECH Plasma's infrastructure differentiates itself in two aspects: the consensus model and its Bitcoin bridge. 1.) PlasmaBFT At the core of Plasma is its custom consensus mechanism - PlasmaBFT. PlasmaBFT is the network's own version of HotStuff, a modern approach for reaching consensus in a network that is more efficient than older designs like Tendermint. HotStuff is efficient because: 1.) It doesn't use fixed timeouts. Instead of waiting a fixed amount of time before moving on (like in older systems), HotStuff moves forward as fast as the network allows, as long as the leader is working properly (honest, not experiencing network delays or performance issues, etc.). For those who do not know about fixed timeouts, these are predefined waiting periods used in older models like Tendermint that can slow things down. For example, even if it's obvious the leader has failed, the network might still wait the full 3 seconds before doing anything. 2.) It keeps communication simple. While older protocols often use “gossip-style” communication (every node talks to every node), HotStuff takes a more linear approach: • Only the leader coordinates. • Other nodes send their votes to the leader. • The leader gathers the votes and builds a single proof of agreement, called a Quorum Certificate (QC). Now that we have better context on HotStuff, we can look at how PlasmaBFT makes consensus even quicker. PlasmaBFT goes faster than HotStuff mainly by reducing the steps needed to finalize a block. While HotStuff requires three steps (Prepare → Pre-commit → Commit), PlasmaBFT finalizes blocks in just two rounds of communication. By skipping the third step, when everything is running smoothly, PlasmaBFT reduces delays without sacrificing security. With this structure, the protocol remains safe as long as no more than 1 out of 3 validators is malicious. Furthermore, PlasmaBFT uses pipelining to boost throughput by reducing idle waiting between rounds. In simple terms, pipelining allows new proposals to be made while previous ones are still being finalized. (Check image n°1 from @PlasmaFDN's documentation) But what if the leader fails? PlasmaBFT addresses this risk by making the most out of QCs. • If the current leader goes offline or misbehaves, validators send their latest quorum certificates (QCs) to the new leader. These are combined into an Aggregated QC (AggQC). • AggQCs help confirm the chain's current state and prevent the new leader from cheating about which block is the latest. Thus, the leader picks up where things left off and continues working as before. 2.) Bitcoin Bridge The second key component that sets Plasma apart is its native Bitcoin bridge. Plasma periodically records its state changes on the Bitcoin blockchain to deliver stronger censorship resistance and a public source of truth anyone can verify. The bridge works through Plasma’s decentralized validator set, the same securing Plasma's consensus model. Validators can choose to run full Bitcoin nodes to synchronize with Bitcoin’s state. They create a Merkle tree (a secure summary of lots of data) that wraps all Bitcoin UTXOs (all info on the Bitcoin people can still individually use) and include it in each Plasma block. This design helps ensure the data remains accurate and makes it easy for anyone to verify the Bitcoin state. The bridge doesn’t only share data but also assets. This is done through a two-step process: • Lock & Mint: Users send $BTC to a Plasma-controlled address. Once the validators see the deposit, they mint the same amount of tokens on Plasma. • Burn & Unlock: When users want their $BTC back, they submit a request on Plasma. Validators check it, sign it, and post a transaction on Bitcoin to release the funds. The whole system makes it easy and secure to move BTC in and out of the chain. Furthermore, as mentioned previously, Plasma uses this bridge to register its state updates to Bitcoin. Finally, even though Plasma is a Layer 1 with its consensus mechanism, this bridge gives it, at the same time, the properties of what is considered to be a Bitcoin sidechain. 💡 CORE STRENGTHS Plasma is committed to a "stablecoin-first experience". In practice, this means the blockchain has features that improve usability, reduce costs, and enhance privacy so that anyone can transfer stablecoins smoothly and without hassle: 1.) Custom Gas Tokens Plasma allows fees to be paid in common assets like $USDT or $BTC. When a user pays with a non-native token, an automatic swap mechanism converts it at the current market rate into the native fee token. Remember all the times you had to switch wallet addresses, copy the address of the other, send $ETH for gas fees, switch back to the previous one, and finally send the transaction? Plasma solves all that. 2.) Commission-Free USDT Transfers Plasma allows users to transfer USDT with zero fees. This is done by differentiating basic transfers (no extra data or special functions) from normal transactions and utilizing separate block layers for each type. Basic transfers have lower priority than normal transactions. Thus, they may take a bit longer. However, for users in price-sensitive regions, it’s still a big win (smooth experience without extra costs). 3.) Confidential Transactions This feature is still being researched by Plasma’s engineering team. The objective is to offer “shielded transactions” to hide transaction details while keeping everything secure and compliant. 🌐 THE BIG PICTURE Since Plasma is backed and supported by none less than @bitfinex, @USDT0_to, & co, the positioning is pretty clear. (Check image n°2 by @PlasmaFDN's blog for the full cap table) Become the go-to chain for everything related to Tether. It’s doing that by building an ecosystem that attracts PayFi apps, stablecoin DEXs, banking-as-a-service platforms, and fintech startups. Why would they join? Because being backed by the biggest stablecoin player means they can tap into Tether’s massive distribution network as soon as they land on the chain. On top of the distribution network, Plasma also benefits from Tether's strong brand reputation and institutional connections, two major advantages to grow its ecosystem, attract users, and expand the product offering. Users won’t just be able to transfer stablecoins but also trade, earn yield, and so on. This is done by carefully expanding the ecosystem with what appears to be a "tailored" selection of companies highly aligned with Plasma's vision: • @ethena_labs - The largest decentralized stablecoin • @CurveFinance - The go-to stablecoin DEX • @yellowcard_app - Africa’s leading stablecoin infra provider • @BiLira_Kripto - A Turkish lira-pegged stablecoin • @uraniumdigital_ - An onchain platform for trading uranium In conclusion, with a tailored infrastructure but, even better, a distribution network of over 100 million users, Plasma is in a strong position to enter today’s hottest sector in the global economy. With the U.S., the EU, and other regions setting clear regulations, and many countries already using stablecoins for international trade, it’s no longer a question of whether stablecoins will reach trillions in value. It’s just a matter of when. And Plasma has a concrete chance to become the leading settlement layer for this new reality.