🩸 Demand for Plasma

Yesterday we went on a bit of a wild ride. First, folks were really excited when Paraguay’s president, Santiago Peña, posted that his country would accept bitcoin as legal tender, seemingly following in the footsteps of El Salvador…until it was revealed that his account was compromised. 

The Presidencia Paraguay account was quick to clarify that the announcement wasn’t coming from Peña himself and that the information was inaccurate. 

Peña’s now-deleted post did, admittedly, have all of the markings of a scam. 

“Your investment today will determine the scale of this rollout,” the post claimed. It also suspiciously included a wallet address, which I’m assuming the government of Paraguay would not include in an official announcement. 

But, hey, at least some things in crypto never change.

🚊 Full speed ahead

Plasma received $500 million in stablecoin deposits rather quickly yesterday, shocking some and affirming that the token sales appetite is back in full force. 

But let me back up for a second. Plasma, which raised $24 million from the likes of Framework Ventures, is gearing up for a sale of its XPL token. Plasma team member Googly was careful to clarify that the sale hasn’t yet happened. 

Ahead of the deposits, Blockworks Research penned a subscriber-exclusive note from analyst and 0xResearch podcast host Boccaccio, which dropped before the deposits even went live. If you didn’t already know, Plasma is a stablecoin company building a Tether-focused blockchain.

“We expect Plasma to allow 3-4 rounds of deposits over the deposit phase, with the total deposit reaching $1.5B to $1.75B. At this level, if Plasma launched at $2B TGE, APR on deposits would range between 35-50% if the lock up was for 3 months, and range between 25-40% if the lock up was for 4 months,” Boccaccio wrote yesterday.

His tone in the piece was cautious yet optimistic, he noted that there are “uncertainties” but also told me that he likes Plasma “overall.”

“They are purpose-built and focused on stablecoins, particularly payments, with their zero-fees on payments model. There are a few other stablecoin chains launching, some similarly backed by Tether/Bitfinex/Paolo [Ardoino]. At this point, it's really a product, [business development] and [go-to-market] competition between these chains,” he said.

For me, Plasma also served as an example that pump[dot]fun’s targeted $4 billion valuation through its $1 billion raise — a story Lightspeed’s Jack Kubinec and I broke last week — will have a lot of appetite despite how upset people were on X. 

“Pump would not have looked to raise 1B if they didn't think they could fill it. I think Pump will fill quickly, and it'll get some [of] the ‘it's extractive’ people off its back. People want exposure more than they want to philosophize about morality, and this should give them the opportunity to do so,” Boccaccio said. 

But Plasma has some big shoes to fill. The stablecoin space is heating up, as we’ve written about multiple times here on Empire. However, I am curious if Plasma can make a meaningful impact on the space, and perhaps compete with something like Tron. 

“It is very difficult to take on Tron. They have probably the biggest moat within crypto at the moment, apart from Tether themselves,” Boccaccio noted. “The chain has been getting more expensive, particularly for payments, but any competitor needs to be very boots-on-the-ground in markets where Tron dominates and build strong contracts and relationships. It will be difficult to get people to switch over.”

The appetite is there, sure, but — as Boccaccio noted yesterday — the chain launch is going to be a very important component here because it creates a “substantial opportunity cost.” So keep an eye on Plasma’s timeline.

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• The Senate will undergo a vote on the GENIUS bill, the stablecoin legislation, on Wednesday. 

• Crypto companies really are eyeing public markets: Uphold is exploring avenues to go public. 

• Bitcoin Core developers merged a change to OP_RETURN into v30, which will take place in October.

Speaking of stablecoins, Societe Generale, the French bank, is plotting its own USD-pegged stablecoin. 

Here are the details: USD CoinVertible (USDCV) will be issued through its crypto subsidiary, SG-Forge. USDCV is being launched on Ethereum and Solana, and follows Forge’s previous debut of its Euro-denominated stablecoin, EURCV (which launched in 2023). BNY will act as a reserve custodian.

Societe Generale seems to be willing to carve a path out here, and I don’t expect this type of announcement to be on its own for very long. Banks across the world are hungrily eyeing the opportunity that stablecoins present — not only on a cost basis, but also because they’re aware that the use cases are there. 

With trading for the USD stablecoin expected to begin in July, we’ll soon get to gauge appetite and performance for these types of offerings. How fun!