Last year, I met an engineer who has been working in the payments industry for over ten years. While tinkering with cross-border payment interfaces, he was complaining—"You blockchain folks always say you want to disrupt payments, but where is the chain that actually makes stablecoin settlements easy for small merchants without worrying about Gas fees or slippage?" I honestly couldn't answer at the time.

Recently, I spent a lot of time studying Plasma's tech stack and on-chain ecosystem, and only then did I start to see the potential way forward for this new chain. It's not the kind of hype that claims millions of TPS but turns out to be fragile in practice. Instead, it redefines how stablecoins and DeFi are used from the ground up.

Regarding Plasma, the most eye-catching data is: just three weeks after its mainnet launch, it attracted $8 billion in TVL, directly ranking in the top ten on-chain. The numbers are impressive, but the underlying logic is even more worth discussing.

Most lending protocols on current chains operate independently—Aave builds its own liquidity, and Compound has to do the same, resulting in the entire market being fragmented into pieces. Plasma is different. It has a foundational component called Fluid that directly separates the liquidity layer, turning it into a shared public infrastructure accessible to all upper-layer applications. Whether it's lending or DEXs, as long as you build on Plasma, you automatically connect to the same liquidity pool. This change significantly boosts capital efficiency by several orders of magnitude.

The core innovation lies in Plasma's use of a technology called "Range Positions" to completely overhaul the liquidation mechanism. Traditional lending protocols' liquidations work like this: price fluctuations → trigger liquidation threshold → wipe out all positions → executor profits from the spread. The process is rigid and especially unfriendly to small loans. Fluid's approach is more precise—it doesn't forcibly liquidate everything but dynamically adjusts based on real-time risk, maximizing capital utilization while reducing the risk of lenders being liquidated.