Plasma has encountered a rather dramatic contradiction: on-chain activity and TVL are on the rise, with lending volume comparable to established protocols, yet the XPL price has crashed. This 'disconnection between technology and market' is not an isolated case, but it is particularly clear in the case of Plasma. When we break down the surface, the reasons and responses are quite realistic and operational.
First, why can TVL be high while the token plummets? The key lies in the token's value capture mechanism and the structure of the primary market. Plasma secured massive funding in its early days, pushing its valuation very high; at the same time, the founding team, early institutions, and ecological funds occupied a large share of the token allocation. Even with lock-up terms, there still exists a liquid 'ecology and growth' pool that partially unlocks during the TGE, used for market making and providing liquidity to exchanges. The money seen on-chain entering exchanges can easily be interpreted by the market as 'dumping' in the absence of communication, leading to panic and sell-offs.
Next is the issue of mismatch between supply and demand. Plasma adopted a paymaster design to subsidize gas for user experience, making ordinary users feel almost no need to hold XPL to complete stablecoin transfers. This 'user-friendly' approach is effective in attracting traffic, but it weakens the rigid demand for the token: a large number of users are just 'here to use the service' and lack the motivation to buy tokens and hold them long-term. Coupled with the short-term cashing out from early airdrops and the large positions of whales, the token price is more prone to amplified fluctuations.
Is there any hope? There are indeed paths forward. There are several feasible directions: first, to more directly return protocol revenue to the tokens, for example, using part of transaction fees and lending spreads for buybacks and burns or distributing to stakers, forming an actual value closed-loop; second, to design more attractive locking and staking mechanisms, binding token holders and ecosystem growth together through long-term staking rewards and sub-chain growth dividends; third, to improve the transparency of liquidity operations - the use and timing of exchange liquidity provisions and market-making bullets should be publicly announced in advance and paired with on-chain verifiable multi-signature/governance records to reduce market misunderstandings; fourth, to expand the essential scenarios for XPL, such as settling certain high-end settlements, merchant services, RWA settlements, or cross-border clearing with minimum margins and fees settled in XPL on the protocol level.
From an operational perspective, the project team must first repair the communication link: clarify the funding flow, unlocking schedules, and liquidity arrangements, even if very technical details must be made public in a simple and clear manner. Secondly, prioritize launching verifiable token return mechanisms; one to two practical 'real monetary' measures are more effective in stabilizing emotions than any hollow vision. Finally, continue to produce technology and real use cases: active code, actual flows of cross-border payments and merchant settlements are the long-term evidence needed to reverse market expectations.
The suggestions for ordinary users and merchants are also very direct: ordinary users should start with small amounts to experience it and not put all the money they urgently need on-chain at once; merchants should clarify the settlement SLA, refund, and arbitration processes before integrating; developers should not only look at TPS and gas costs when making integrations, but also evaluate withdrawal channels, fiat channels, and compliance risks. For investors, the focus should not only be on TVL and daily active users, but also on how many directions 'XPL passively siphons away': staking rate, buyback and burn frequency, the proportion of tokens actually used for settlement, and the upcoming unlocking schedule.
The last sentence: Plasma demonstrates an important lesson - on-chain prosperity does not equal token security. Technology can create value channels, but turning traffic into token value still requires transparent capital operations, reasonable token economics, and sustainable demand design. The current XPL has both undervalued fundamentals and very real structural risks. Whether it can turn around depends not only on code but also on whether the team can make governance, financial transparency, and economic closed-loop into a replicable standard process.
