Plasma Secures $24 Million Funding to Develop Zero-Fee Stablecoin Blockchain
Plasma, a Web3 startup focusing on stablecoin transactions, has raised $24 million in a Series A funding round to build a blockchain dedicated to stablecoins like Tether USD. The funding will accelerate the development of Plasma's Bitcoin sidechain network, enabling zero-fee transactions for stablecoin transfers.
Key Facts
- Plasma's blockchain will operate independently from Bitcoin's main network using its own consensus mechanism for improved security and scalability.
- The protocol will focus exclusively on stablecoin transactions, excluding features like NFTs and governance.
- The network is expected to launch in Q2 2025, supporting a testnet and mainnet rollout.
- Part of the funding will also target remittances and enhance participation in payments and DeFi ecosystems.
- The funding round was led by Framework Ventures and included contributions from Bitfinex, Peter Thiel, and Tether’s CEO Paolo Ardoino.
Market Context
The stablecoin market is expanding, with Ripple recently introducing its own stablecoin and Wyoming launching a state-backed version. As of 2024, total stablecoin circulation reached $169 billion, with Tether controlling 70% of that supply. Tether reported $13.7 billion in profit for 2024, though increased competition and regulatory scrutiny could affect its strategy.
Regulatory Landscape
- Stablecoin adoption in the US faces regulatory challenges, prompting a bipartisan group of senators to propose a comprehensive regulatory framework.
- Two proposed bills aim to enforce stricter compliance for stablecoins: the STABLE Act and the GENIUS Act.
- Analysts indicate that only 66% of Tether’s assets comply with the STABLE Act, while 83% meet GENIUS Act requirements, with compliance ratios declining as supply increases.