Plasma - Scalable Payments and Financial Infrastructure on Bitcoin

Today, we’re excited to announce Plasma—the execution environment for Payments, Real-World Assets, and DeFi with trustless settlement on Bitcoin, driven by USD₮.

After years of research, we’ve developed a high-throughput Bitcoin scaling solution that operates without requiring any changes to Bitcoin Core.

Solving Global Payment Challenges

The current payment industry—particularly cross-border payments—is plagued by hidden fees, value-extractive intermediaries, and local inefficiencies. On top of that, it is hugely capital-intensive. Onchain payments powered by stablecoins have the potential to increase efficiency and offer near-zero-fee, real-time cross-border transactions. Yet, currently, the vast majority of on-chain payments occur on centralized platforms or less secure blockchains.

Bitcoin is the largest, most decentralized, censorship-resistant, and secure blockchain in the world. This makes it the obvious choice to replace the current global payment rails. There have been previous attempts at making Bitcoin the settlement layer for payments; however, these attempts have only focused on BTC as the primary payment asset. We believe that while Bitcoin is the best blockchain for settling payments at scale, payment flows will be in USD-denominated assets—the most dominant of which being USD₮.

Our north star is to build a trustless execution layer on Bitcoin for the entire global financial industry. But to start, we are tackling the payment industry, which annually extracts hundreds of billions of dollars in value from consumers. Plasma is building zero-fee payment rails for USD₮. With Plasma, you can send USD₮ to anyone, anywhere in the world—nearly instantly and with no transaction fees whatsoever, all on Bitcoin.

Plasma Architecture

Plasma's architecture builds on years of research—we’ve developed a novel, peer-reviewed, and published Nakamoto PoS consensus mechanism that improves throughput by 3x and reduces 99th-percentile latency by 5.7x compared with other state-of-the-art protocols. Plasma's consensus mechanism uses sub-second difficulty adjustments to tune security and performance in real-time. This achieves more than a 100x improvement in throughput and latency compared to Bitcoin, enabling over 1,000 transactions per second while inheriting Bitcoin’s security.

Built on a native UTXO foundation, Plasma allows gas fees to be paid with BTC and works seamlessly with existing Bitcoin infrastructure. By leveraging a hybrid UTXO/Account architecture, users can unlock new functionality for holding, staking, and deploying their Bitcoin, seamlessly traversing between UTXO and account space. In addition to full bytecode-level EVM compatibility, our flexible VM architecture opens up future compatibility across arbitrary VMs, such as Wasm.

Scaling Bitcoin Together

We’ve assembled a team of builders and researchers with backgrounds in large-scale distributed systems and experience building some of the largest chains and apps in crypto to solve Bitcoin scaling. We welcome amazing partners and advisors in support of this mission including Bitfinex, Peter Thiel, Cobie, Christian Angermayer, Split Capital, Manifold, Anthos Capital, Karatage, and others.

Bitfinex is excited to support the growing Bitcoin ecosystem with our investment in Plasma. With the uncertainty that covenants will come to fruition, it's very important to explore different avenues to build on top of the most secure, decentralized, and resilient money and speech network ever built by humanity: Bitcoin" said Paolo Ardoino, CTO of Bitfinex.

We’ll be sharing more details on Plasma's unique architecture in the coming weeks. In the meantime, follow @PlasmaFDN, turn on notifications, and sign up for our newsletter to receive updates and gain early access to our upcoming Devnet launch.