Plasma vs Stable: Exploring Stablecoin Dedicated Chains

Author: Chilla Source: X, @chilla_ct Translator: Shan Oppa, Golden Finance

Stablecoins are dominating the market, entering applications in traditional finance (TradFi) and retail users. For example, in South America, some supermarkets display prices directly in USD₮. This use case is real, and therefore, there may be a need to seek new infrastructure to support this expansion.

Recently, we have seen some announcements related to stablecoin chains, such as Plasma and Stable.

• What are they?
• What is the difference?
• More importantly, are they really necessary?

The Rise of Stablecoin-Specific Chains

Plasma and Stable both aim to make stablecoin transfers faster, cheaper, and more scalable. Their core idea is to attract liquidity from old networks that have large capital amounts but lower efficiency.

Although there are some fundamental differences between these two chains, their similarities may be more. The most important common point is USD₮, which is the “center” of both.

More specifically, they all integrate USDT0. This is the “anti-fragmentation” version of USD₮, which can be natively swapped via LayerZero, currently based on Arbitrum and continuously expanding to new chains. For end users, the experience of using it is no different—just as simple as USD₮. If you want to know more, you can check out another article on this topic (not self-promotion, it might really be useful for some people).

Plasma

Plasma is built as a sidechain to Bitcoin, meaning it benefits from Bitcoin’s security through “anchoring,” but has its own independent consensus mechanism. In short, malicious actors would need to compromise Bitcoin itself to alter Plasma’s history, but Bitcoin does not validate Plasma’s blocks.

It is specifically optimized for thousands of TPS (transactions per second) and about 1 second of finality, making it very suitable for fast USD₮ transfers. However, compared to ordinary chains, its most outstanding feature is that there are no gas fees for simple USD₮ transfers. So how does it make a profit? In fact, all other operations on the network will incur gas fees, leveraging the “second-order effect” brought about by the increase in overall on-chain activity.

Another special aspect is that when a transaction fee is required, users can pay with USD₮ or BTC. In addition, it is fully compatible with EVM, allowing developers to easily deploy Ethereum-based applications. Plasma is supported by Bitfinex and Tether, which also explains its strong focus on USD₮ and Bitcoin.

Stable

Stable has chosen a slightly different route. It is an independent Layer 1 chain, rather than a sidechain, using its own Proof of Stake mechanism. Like Plasma, Stable is also EVM compatible. USD₮ transfers are also gas-free, but users still need to pay fees for other on-chain operations. The difference is that these fees can only be paid with USD₮.

Stable has received support from Bitfinex and USDT₀. At the same time, Tether CEO @paoloardoino has served as an advisor since the beginning of the project, which fully demonstrates its focus on major circulating stablecoin (USDT).

Additionally, Stable seems to focus more on enterprise and institutional users, but this topic will be discussed later.

Privacy and Institutional Users

Both networks plan to focus on privacy features. Although there aren’t many details yet, Plasma mentioned the concept of “protected transactions,” while Stable referred to “Confidential Transfers.” These features are designed to protect transaction privacy while ensuring compliance.

Overall, there is currently not much information on how to specifically differentiate and allocate users between these two chains in the market. In addition to the technical differences mentioned above, it is said that Stable will also introduce more institution-friendly features, such as:

• Enterprise-Level Blockchain Space: Providing dedicated blockchain space for companies ensures transaction speed and stable fees even in the event of network congestion.
• USD₮ Transfer Aggregator: Packages multiple USDT₀ transfers together for faster and cheaper processing.

But do they really have practical use cases?

Among the 15.83 billion USD₮ in the market, 49.27% is on Tron. But are people still using this chain? The updated chain ecosystem is much stronger.

However, Tron was indeed one of the cheapest and fastest options initially. Therefore, Tether has been using it to mint and transfer funds. But Tron was not designed for this purpose. More importantly, Tether itself does not directly participate in this chain; it is just using it. If USD₮ loses its dominance, it could be a fatal blow to Tron. And this situation is indeed happening because Tron lacks a sustainable ecosystem.

Chains like Plasma and Stable are specifically designed to draw liquidity from ecosystems that lack a solid DeFi foundation. Their goal is not to “eliminate competitors,” but to easily surpass slower chains by creating a USD₮ payment and commercial settlement center, especially with the advantage of zero transfer fees. The liquidity attracted in this way has the potential to bring in users and capital, ultimately fostering new DeFi protocols and building a truly “living” ecosystem.

All of this could create something similar to SWIFT in the stablecoin space - Tether is not just issuing stablecoins, but will also become the backbone of its currency and underlying infrastructure. Tether can benefit from the growth of USD₮, while Plasma / Stable can benefit from the velocity of funds on the network.

However, this does not mean that other chains will be forgotten. Absolutely not. Other active ecosystems, such as Solana (which primarily focuses on debit card payments and fiat deposits/withdrawals), Ethereum and its L2 (focusing on DeFi), as well as new chains with specific application scenarios, will not necessarily be affected.

Recent Developments of Plasma

Although this does not imply long-term sustainability, short-term interest has been fully demonstrated - the funding cap raised by Plasma’s public token sale has reached a deposit of 1 billion dollars. This means that once it is launched, it will become the 12th chain in stablecoin liquidity ranking.

In addition, Plasma has already launched several collaborations, such as:

• @yellowcard_app: Supports USD₮ transfers within Africa.
• @BiLira_Kripto: Connecting the Turkish lira with stablecoins to enable cross-border payments.
• @uraniumdigital_: Bringing commodity trading on-chain.
• @AxisFDN: Launched a yield-generating synthetic US Dollar (xyUSD).
• Collaboration between @CurveFinance and @ethena_labs.

We are also looking forward to what Stable will do next.

Conclusion

This does not mean that this product will definitely find a “product-market fit” (PMF). In fact, the concept of a “stablecoin dedicated chain” may just be a clever marketing strategy to highlight USD₮ and hype the selling point of “gas-free transfers.” It’s somewhat like a “vampire attack,” but instead of issuing tokens out of thin air to reward users (like SushiSwap’s approach), it competes by eliminating trading costs for users, similar to a “freemium model” for trading.

Both chains meet the basic requirements. What is truly interesting next is to see how they distinguish themselves from each other, what issuance and promotion strategies they adopt, and most importantly - whether they can establish a long-term sustainable ecosystem.