The term "Plasma" in the context of cryptocurrency and blockchain can refer to two main concepts:
1. Plasma as a Layer-1 Blockchain (XPL) Plasma (XPL) is a Layer-1 blockchain specifically designed for global stablecoin payments. Its primary goal is to address the limitations of existing networks for stablecoin transactions, focusing on speed, cost, and scalability.
Key features of this Plasma blockchain include:
Stablecoin-focused architecture: It's optimized for zero-fee USDT transfers and aims to integrate Bitcoin liquidity via a trust-minimized bridge.
EVM-compatible: Developers can deploy Ethereum-based smart contracts with ease, allowing for a wide range of payment-oriented applications.
PlasmaBFT Consensus: This consensus mechanism provides fast transaction finality and supports high throughput for payment applications.
XPL Token: This is the native cryptocurrency of the Plasma blockchain, used for transaction fees (for non-USDT transfers), staking, and validator rewards. Validators stake XPL to secure the network and participate in block production.
2. Plasma as an Ethereum Scaling Solution Historically, Plasma was also proposed as a Layer-2 scaling solution for Ethereum by Vitalik Buterin and Joseph Poon in 2017. This concept aims to improve Ethereum's efficiency by offloading transactions from the main chain to a hierarchy of "child chains" or "Plasma chains."
Key aspects of Plasma as a scaling solution:
Off-chain processing: Transactions are processed on these child chains, with only deposits, withdrawals, and Merkle roots periodically reporting back to the main Ethereum chain.
Hierarchical structure: Plasma chains are structured like a tree, with multiple child chains built on top of the main Ethereum blockchain, and further chains can be built on top of those.
Fraud proofs: These are used to ensure security and to settle any disputes that may arise on the child chains with the main chain.
Framework, not a single project: This Plasma concept is a framework for building scalable applications, meaning different research groups can implement it in various ways.
While the Plasma scaling solution offered significant improvements in scalability, it also faced challenges related to data storage costs and limitations in its application beyond payments, with rollups largely replacing it as a preferred scaling method for Ethereum. However, the emergence of validity proofs (ZK-SNARKs) has led to a reconsideration of Plasma's viability for creating EVM-compatible Plasma chains.
