Plasma is a new Layer-1 network built for stablecoin use, and with backers including Bitfinex, Tether, and Founders Fund. It’s EVM-compatible, features a native BTC bridge, and has already integrated with major DeFi protocols and surged in TVL. Users can earn yield on Plasma assets across platforms such as Aave, Fluid, Euler, and Gearbox, where stablecoin pools are offering competitive returns.
New Layer-1 blockchain Plasma generated a huge buzz last week with the launch of its mainnet and token, and there are now opportunities to earn yield from assets on the Plasma network.
So in this guide, we’ll take a look at what Plasma is and why to use it, and then walk through how to lock in yield from Plasma tokens on several protocols.
What Is Plasma?
Backed by huge names including Bitfinex, Tether, and Peter Thiel’s Founders Fund, Plasma is a new EVM-compatible Layer-1 that is optimized for stablecoins, stating that its “mission is to become the foundation for global money movement”.
It also utilizes a native BTC bridge, enabling BTC to be used in smart contracts through a token called pBTC, which is backed 1:1 by BTC in a deposit address, and–as it’s a LayerZero token–operates across multiple chains.
Plus, Plasma has released teasers for a project called Plasma One, which plans to be a crypto-native neobank.
Plasma’s mainnet beta went live last Thursday along with its token, XPL, and it already has more than $6 billion in stablecoins onchain, while its DeFi TVL has soared to over $5.4 billion, making it the sixth largest network by TVL.
Stablecoins on Plasma are already deployed across several integrated DeFi protocols, some of which we’ll look at below, and the XPL token has a current market cap of $2 billion.
How to Use Plasma
To get started, you need to open the Plasma Dashboard, and you’ll have everything centered around that hub, including a Portfolio feature where you can keep track of your holdings.
From the Dashboard, you can use the Bridge to move tokens across from other chains (this is actually the Stargate bridge), and for token swaps there are links to DEX aggregators Matcha and Oku. For an alternative bridge that operates across a very wide range of networks, deBridge is a useful option.
Also, you can click on Plasma’s Ecosystem tab to get an overview of all the integrated and affiliated protocols, within which are several opportunities to earn yield. Some prominent names here are Aave and Fluid, both of which we’ll cover in a moment, and you can head straight over to their websites directly from the Plasma Dashboard.
However, before using any DeFi protocol, keep in mind that there are several risks, including the possibilities of frontend attacks, smart contract vulnerabilities, stablecoin de-pegs, and high volatility across the crypto ecosystem.
Plasma on Aave
On Aave, if you head to the Plasma Market section, you can see all the supported Plasma-based assets, and currently, the top yield is available on the USDT0 stablecoin, which is offering a Supply APY of 8.01%.
So, if you want to deposit, for example, USDT0, you can use the token swap protocols mentioned above (Matcha or Oku) to get hold of it, and then on Aave, you just need to click on that market and you’ll be able to check all the details and make a deposit.
Plasma on…
