Hey Edge readers,

Stablecoins are the hottest thing in crypto right now.

In 2024, dollar-pegged stablecoins processed more value than Visa. What started as a way to simplify crypto trading is now becoming the backbone of global payments. But even as stablecoins explode in popularity, the infrastructure to move them remains stuck in the past. Ethereum is congested and expensive. Tron works, but comes with tradeoffs.

This week, we’re spotlighting Plasma, a new blockchain purpose-built for stablecoins. Its pitch is simple: zero fees for USDT transfers, instant settlement, and Bitcoin-grade security. The goal? Make moving money as easy as sending a text, and turn USDT into the internet’s default dollar.

Stay sharp. 🫡

-The Exponential team

A chain built for one thing: Moving stablecoins

In crypto, it’s easy to get distracted by speculation, cycles, and ever-changing narratives. But beneath it all, one use case has quietly reached escape velocity: stablecoins.

Dollar-pegged stablecoins like USDT and USDC have surged past $250B market cap, and now make up over 1% of the entire U.S. dollar supply! Stablecoins settled more value than Visa ($15.6T in 2024 alone) and are used across the world in ways most crypto apps can only dream of. In Africa, they’re used for remittances. In Argentina, they’re a lifeline against inflation. In the U.S., they’ve become shadow buyers of Treasury bills. And in sanctioned markets, they’re powering real-world trade.

In short, stablecoins have found product-market fit on a global scale. But the infrastructure they run on hasn’t kept up.

Ethereum, where stablecoins first gained traction, is congested and expensive. Tron has filled some of the gap by offering lower fees, but it’s heavily centralized and limited in scope. Fintech incumbents like PayPal are moving in, but still operate walled gardens with high fees and compliance friction.

So what if a blockchain were designed specifically for moving stablecoins?

That’s the bet behind Plasma.

Plasma isn’t trying to be another general-purpose L1. It isn’t launching with lofty visions of decentralized identity, gaming, or DAOs.

Instead, it has one goal: to become the global settlement layer for stablecoin transactions.

Its design reflects that singular purpose:

• Zero fees for USDT transfers, with no staking or gas tokens required.

• EVM compatibility to support DeFi protocols out of the box.

• Bitcoin-grade security, with Plasma designed to anchor into Bitcoin via BitVM-style validation.

• Native support for Tether, which is backing the network with infrastructure, liquidity, and incentives.

The result is a blockchain that feels more like a payments rail than an app layer, designed to send digital dollars around the world with the same ease as a text message.

And that focus may prove to be its greatest strength.

Why specialization matters

In an industry obsessed with modularity and “general-purpose everything,” Plasma’s singular focus on stablecoins is a refreshing change.

The upside of specialization is real. By optimizing blockspace exclusively for stablecoin throughput, Plasma avoids the congestion and unpredictable gas spikes of Ethereum. And by removing native token friction, it can support users and merchants who don’t want to hold speculative assets or jump through hoops to send money.

This unlocks use cases that have long been possible in theory but impractical in practice:

• Microtransactions (tip someone $0.50 without a $1 fee).

• Cross-border remittances with zero middlemen or FX fees.

• Global commerce between merchants and suppliers, settled instantly in USDT.

These aren’t marginal improvements, they’re orders-of-magnitude changes in how money can move onchain.

Beating Tron at its own game

Tron became the dominant USDT chain by offering lower fees and faster confirmations than Ethereum. It now processes over $6.5T in annual USDT volume, making it the de facto home for USDT transfers.

But Tron isn’t free. Users must stake TRX to access discounted fees, and merchants still face costs and friction. Its validator set is small and quasi-permissioned. And despite its reach, Tron has struggled to attract meaningful DeFi or developer traction beyond basic transfers.

Plasma pushes further. No fees. No staking. No friction. And crucially, its economic model doesn’t rely on taxing usage to accrue value. Instead, it embraces a growth-first, monetization-later approach that mirrors what Web2 platforms did to dominate their markets.

This could be a deciding advantage. In crypto, the network that makes money movement the easiest often wins. Plasma is betting that UX will define the next dominant stablecoin chain.

A wedge into DeFi and beyond

What happens when a network becomes the go-to place to move digital dollars? Liquidity follows.

Already, we’re seeing major DeFi protocols lining up to launch on Plasma. Aave, Curve and Ethena are among the first, but others will likely follow as stablecoin liquidity deepens. And once Plasma becomes a reliable home for stablecoin flows, it could start to pull in other assets like Bitcoin.

Here’s why that matters: Bitcoin’s most traded pair across centralized exchanges is against USDT. The BTCUSDT market on Binance alone has processed over $4.9T since 2017. If BTC finds reliable bridges to Plasma, and stablecoin liquidity is already there, it creates natural incentives for trading activity, arbitrage, and even onchain market making to migrate to the network.

The road ahead

Plasma is arriving at an opportune moment. Stablecoin adoption is accelerating worldwide, driven by both grassroots demand and institutional interest. In the U.S., lawmakers are advancing the GENIUS Act, a bipartisan bill that would establish clear federal standards for fiat-backed stablecoins. If passed, it could unlock broader adoption by banks, fintechs, and asset managers.

Plasma’s alignment with this regulatory trajectory gives it a structural advantage but it isn’t guaranteed to succeed. The chain will need to attract validators, onboard users, and fend off competition from Ethereum L2s, Solana, Tron, and traditional fintech platforms. But its focus is clear and the opportunity is massive.

Trillions.

In the news 🗞️

• Stripe acquires Privy to power stablecoin payments. Fintech giant Stripe has acquired crypto wallet provider Privy, rounding out its full-stack infrastructure for stablecoin-based payments. The move follows its earlier acquisition of Bridge and signals growing interest in consumer-facing crypto apps that abstract away wallet complexity. With Ethereum, Solana, and Polygon as supported rails, Stripe’s bet could accelerate mainstream adoption of stablecoins in digital commerce.

• Ant Group seeks stablecoin licenses across three regions. Backed by Alibaba, Ant is reportedly applying for stablecoin licenses in Hong Kong, Singapore, and Luxembourg, aiming to issue regulated digital dollars for cross-border payments. With stablecoin supply hitting an all-time high of $250 billion, the move highlights Asia’s growing interest in leading the next wave of stablecoin adoption, as traditional tech giants rush to claim their share of the market.

• Walmart and Amazon eye stablecoins to cut fees. According to the Wall Street Journal, both retail giants are exploring dollar-pegged digital tokens to bypass card networks and speed up settlements, especially for cross-border payments. The move hinges on the Genius Act, a stablecoin regulation bill advancing through Congress, and could mark a major shift away from banks and traditional finance rails.

• Morpho V2 brings DeFi lending closer to TradFi. Morpho has unveiled V2, an upgrade that enables fixed-rate and fixed-term loans with flexible collateral types. The new intent-based model lets users define their own loan terms, offering TradFi-style predictability while preserving DeFi’s permissionless nature. V2 also adds optional compliance tools like KYC and whitelisting to meet institutional demand.

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