Short Plasma ($XPL) at $10B

Everyone on CT is screaming TRILLIONS about Plasma. At a $10B FDV it’s being sold as the future of stablecoin payments. I think the hype is way ahead of reality. Here’s my contrarian take:

1) Tether is fine without Plasma

• ◆Plasma is backed by Tether and its CEO Paolo Ardoino but there is no exclusivity between the two. Paolo even invested in a Plasma competitor, @stable. USDT will stay multi-chain and its footprint will grow with or without Plasma, extending to other stable chains as long as there is demand to transact on those networks.
• ◆Tether issues USDT, but it doesn’t control where or how people use it. The rails (wallet apps, exchanges, OTC desks, merchant integrations) are the ones that actually provide distribution. That’s why Tron won stablecoin flows. Not because of anything Tether did directly, but because Binance and other exchanges chose to make TRC-20 withdrawals cheap and easy, and OTC desks/merchants standardized on it. Tether can encourage partners to add Plasma but it's not going give them preferential treatment.

2) Expectations are over-inflated

• ◆Wallets & exchanges will support Plasma in parallel to other networks. Network effects (OTC desks, P2P wallets, merchant acceptance, exchanges) still favor Tron for the foreseeable future, even when cheaper alternatives exist.
• ◆Plasma’s early integrations are overwhelmingly DeFi-oriented, focusing on reward campaigns rather than wallets, OTC desks, and merchant rails that power real-world stablecoin payments, such as those on Tron. Their newly announced Plasma One is at least aimed at everyday users, but until it is live and scaled which could take months, Plasma risks being just another liquidity-incentivized chain rather than a true payments network.
• ◆People are entering Plasma at 1/4th Tron's valuation, expecting instant widespread adoption. Reality will set in when mainnet goes live and those that are already up multiples will remove risk. Getting traction is the real challenge and most XPL holders in it for a quick buck will get bored and move on to the next narrative.

3) Revenues are tiny even at a huge scale

If Plasma’s ambition is to compete with traditional payment rails, then Visa/Mastercard provide the right comps. Both trade at 30-40x P/S on revenues, supported by huge user bases, defensible moats, and strong profitability.

Now apply this to Plasma:

• ◆At $0.01 per transaction and 10M tx/day (roughly what Tron does, though unlikely near-term), annualized revenue would be $36.5M. On an $10B market cap, that’s a 274x P/S multiple.
• ◆At a more realistic $0.001 per transaction for an “ultra-cheap” rail, revenue falls to just $3.65M annually, implying a 2740x multiple.

By crypto standards, one could argue this isn’t wildly out of line since many L1s still trade at lofty price/fee multiples. But if valued like a real payments rail, Plasma is expensive unless it achieves enormous usage. And my broader view is that L1 valuation multiples will continue to compress as the market matures.

For extra perspective, let's consider neobank comps:

• ◆Nubank (LatAm leader): $77B market cap, forecasting $7B revenue 2025 -> 11x P/S.
• ◆Revolut (EU): $75B valuation, forecasting $5.9B revenue for 2025 -> 12.7x P/S.
• ◆Chime (US): $8.6B marketcap, forecasting $2.15B 2025 -> 4x P/S.Plasma at $10B market cap, with negligible revenue, is being valued like a mid-tier neobank but without proven traction. Expectations are stretched.

4) Tron is the closest comp and it just undercut itself

• ◆Tron dominates USDT flows (millions of tx/day) and functions as the dominant USDT stablecoin rail
• ◆Tron’s FDV/fees sits at 57x up from 40x, after its revenue fell massively when Tron cut energy price by 60% in late Aug 2025 to lower transaction costs and defend its market share against other networks. Validator profitability was deliberately sacrificed, and now TRX, which was once a deflationary token, is inflating by 2-3% per year.
• ◆Tron has a more defensible moat than Plasma. They've already secured millions of users who rely on its network for everyday payments. @justinsuntroncan continue to reduce fees and refine Tron's architecture to maintain his market share.

5) Tech isn’t uniquely differentiated vs general-purpose L1s

• ◆Paymasters are not unique to Plasma: Gas abstraction/paymasters exist broadly across EVM chains. Circle has already implemented for USDC. Apps, wallets, and Tron can easily implement this.
• ◆A few thousand TPS and cheap txs are table stakes these days. Others already deliver comparable or higher throughput. Competing on fees is a race to the bottom. Being a more decentralized alternative to Tron is noble but Plasma's starting validator set is tiny and Tron can further decentralize.
• ◆Plasma One was not built from the ground up. It leverages @raincardsInfrastructure, and any stablecoin issuer, chain, or third-party team could build an indistinguishable product. It still rides Visa rails and merchants still pay Visa-style fees.
• ◆Internal transfers for Cexes are already free and plasma doesn’t erase that advantage when it comes to products like Binance Pay.
• ◆There is a significant emphasis on being a chain for stablecoins, but it appears to be veering in the direction of a general-purpose L1. This isn't necessarily a bad thing or even in their control, since it's permissionless to deploy an app, but it will very much feel like any other chain.

6) Small marginal buy pressure

Remember Berachain's pre-deposit program? Remember the Beras spamming "50b" on the timeline? We all know what happened next. Plasma is running the same playbook: bootstrap liquidity and social yapping by rewarding early community members, and letting them amplify the narrative.

• ◆Everyone with Plasma bags is crypto native, a private investor, member of a fund that got allocation, or someone who got money in their presale. Their target user is unaware of their existence. The DeFi incentives they'll be launching will mostly go to mercenary crypto natives and do little to attract users who will actually use Plasma as a payment rail.
• ◆A lot of presalers previously hedged at a price lower than today's price, $0.6, and then got blown out. This is proof that there will be considerable profit-taking at TGE
• ◆$XPLhas weak utility and the target user is unlikely ever to buy it. Due to plasma’s built-in paymaster, users don’t have to prehold a few bucks of $XPLfor gas. This is unlike Tron's$TRXwhere users could stake $TRXto unlock free transfers. As it stands now, there is no reason to hold $XPLbesides to speculate.
• ◆The 8% of supply unlocked at TGE for DeFi incentives is an S-tier farm for mercenary TVL, and it will 100% lead to sell pressure. The 2b of stables already bridged over will stick around to farm and dump these incentives as long as APRs are competitive, then leave.
• ◆The 4% cash back for Plasma One is paid in $XPLtokens
• ◆“The sale was 7x oversubscribed. No one could get the allocation they wanted.” Are those who missed out willing to pay 14 times the price? I don't think so.
• ◆"The float is tiny". Have we gone back to this? I remember when we used to hate low float high fdv coins. I think this just goes to show the state of the market that we are in. WLFI was low float and a lot of people thinking it would pull a TRUMP got rekt. People learn from their mistakes.
• ◆"Cheap relative to the rest of the market". That logic only works if you believe other coins trading at absurd, unsustainable valuations are a valid benchmark. Comparing Plasma to projects that have already been crimed up doesn’t make it cheap, it just means you’re using inflated comps. If you wouldn’t hold those coins long term, why would you anchor Plasma to them? This is the mindset of flippers.
• ◆"Tradfi needs a way to allocate to the stablecoin narrative." Maybe, but Plasma hasn’t proven itself as the vehicle for that trade. The only thing it’s shown is that it can bootstrap a community. Smart money will see through this. Yes, some TradFi allocators might chase the narrative just like they piled into $CRCL when it traded above USDC’s entire market cap but those flows aren’t sticky.

Plasma could eventually carve out a role in stablecoin payments but right now the hype is far ahead of reality. For me, the risk/reward looks skewed at 10b, and I’d rather fade the narrative and reassess in a month or two when there is concrete on-chain data. In the short term, I do expect $XPL to stay a top narrative as capital bridges over to farm incentives, which could provide near-term price support. I’m short from $0.90 and plan to scale my position with TWAP shorts if price trades above $1, with the view that the current hype will likely fade over the next week or two as farmers dump incentives and holders start to question whether Plasma is really delivering on its promise.