Why Plasma Finance ($PPAY) is Set to Disrupt DeFi…
DeFi for the masses…who would have thought?
As the cryptocurrency boom continues, decentralized finance (DeFi) has taken center stage. An increasing number of financial participants are beginning to understand the flaws of centralized systems, while at the same time acknowledging the underlying merits decentralized systems have to offer. Decentralized borrowing, lending, and liquidity solutions allow for the streamlining of finance and commerce and stand to propel and reshape the world economy in the years to come.
Similar to the early days of the Internet, system usage was the core domain of industry specialists. Similar gaps, inefficiencies, and limitations exist today with respect to DeFi, with a significant portion of total value consumed by a select few “in the know” market participants. Part of the problem with the current DeFi landscape is its fragmentation, front end complexity, and overwhelming optionality. That being said, there exists enormous opportunity for a DeFi market-based solution focused on consolidation and the end-to-end user experience.
If we are all honest with ourselves, Ethereum’s current lack of scalability is the elephant in the room, rendering it practically unusable in its current form. Exorbitant gas fees, along with non-instant transaction processing shut out a significant number of users from experiencing the many positive benefits DeFi has to offer. It can also be argued that high gas costs are hampering Ethereum’s growth potential, and by extension contributing to downside price pressure.
Another less spoken, but equally prevalent challenge plaguing DeFi is the fragmented user experience. As exciting of an opportunity as DeFi presents, I can personally attest to the frustration and difficulty associated with the unabating need to track an ever-growing number of websites, wallets, and login credentials. Operational maintenance is not a simple and straightforward task, even for the most seasoned and savvy of users, let alone for newer crypto joiners.
The aforementioned disturbances have recently been corroborated by DeFi’s newest market entrant and proponent, billionaire Mark Cuban. Per his recent commentary on the Defiant podcast, Cuban speaks about these limitations in detail. It is a lengthy interview overall, but I will point to 2 sections in specific:
1) 16:56: Mark answers questions about Ethereum fees limiting Ethereum’s usage, and as a result, its longer-term upside potential.
2) 28:47: Mark speaks about the current complexities of the DeFi user experience and how there is a need for simplification to foster greater adoption.
In response, Plasma Finance (ticker $PPAY) aims to solve the above challenges via its various business verticals, i.e., PlasmaPay, Plasma.Finance, and PlasmaSwap, each of which are explained in the forthcoming sections.
PlasmaPay
Plasma’s first core product is PlasmaPay. PlasmaPay is licensed in Europe and provides utility to individual and business users alike. In a nutshell, you can think of PlasmaPay as Plasma’s onramp / offramp + secure wallet solution. Currently, 42 fiat currencies and 3000+ cryptocurrencies are supported, with coverage allowances granted across 160+ countries worldwide. PlasmaPay also allows for the purchase and sale of cryptocurrencies, both with cryptocurrency as well as directly with fiat (Visa, Mastercard, and bank wire are all supported fiat payment options). PlasmaPay also utilizes its PlasmaChain solution to support cross chain bridging. Simply put, PlasmaChain allows for the seamless swapping of cryptocurrency across differing blockchains (think, interoperability).
Plasma.Finance
Plasma.Finance is Plasma’s next product vertical. Plasma.Finance provides users with a holistic, customizable DeFi dashboard and hosts all underlying Plasma DeFi products in a consolidated, easy to navigate and understand user interface. The following applications are core features of the user experience:
· Market overview: Summary of high-level market statistics, e.g., biggest movers, highest yield opportunities, etc.
· Portfolio management: Flexibly allows users to merge wallets and execute holistic strategies in a few easy mouse clicks.
· Liquidity pools: Aggregates LP analytics across multiple DEXs, with the most profitable opportunities highlighted in real time.
· Lending & borrowing: Provides transparency as to the best lending and borrowing rates, with rates sourced across the most competitive industry protocols.
· Fiat onramp / offramp: Seamless integration for fiat deposit and withdrawal, with 160+ eligible countries supported; in applicable countries, users can also make crypto purchases with fiat directly.
· DEX & swap aggregator: Aggregates quotes across DEXs to provide best execution price with the lowest fee rate.
· Cross chain asset swapping: Ability to swap tokens interoperably (i.e., PlasmaChain will act as sidechain to Ethereum and Binance Smart Chain to execute cross chain swaps).
· Governance: Utilize $PPAY token to participate in community governance proposals, with the end aim of holistically improving Plasma ecosystem.
· PlasmaSwap: Targeted for a March release, this is an absolute game changer in terms of existing DEX products. Lightning-fast trades with ZERO cost are some of the expected value add benefits investors can expect.
By simply connecting to MetaMask, novice and experienced crypto users will have access to the Plasma.Finance holistic dashboard. Having each of the above features in a single, easy to use interface is a non-existent market reality today. Plasma.Finance changes all of this — the days of excessive operational crypto maintenance, crypto exclusivity, and counterintuitive user experience are over.
PlasmaSwap
Perhaps the most exciting of the bunch is the up-and-coming PlasmaSwap DEX. Although sitting atop the Plasma.Finance vertical, it deserves its own special consideration given its underlying go to market ramifications.
To begin, PlasmaSwap encourages institutional adoption by integrating common, legacy risk mitigation tools such as stop loss and limit order functionality. Most notably, however, and with the help of its lightning fast blockchain, PlasmaDLT, PlasmaSwap aims to implement near instant transactions with ZERO fees via its Hyperloop bridge gateway. For the uninitiated, the Hyperloop Protocol is a layer 2 solution that utilizes cross bridging to transfer assets to PlasmaDLT. Given transactions are processed off-chain, they can be rapidly processed with ZERO fees. Upon completion, off-chain assets are moved back to the mainchain for final settlement purposes. Not only will PlasmaSwap directly assist Plasma users, it also aims to assist overextended chains (e.g., Ethereum) by reducing overall mainchain transaction strain. The Hyperloop bridge will eventually also support cross chain swaps across a wider array of platform protocols. In the months following its upcoming March launch, Hyperloop will allow for swapping within and across Binance Smart Chain, Polkadot, and Cosmos.
You can read further about Hyperloop below:
In terms of token utility, $PPAY is used for a number of functions, each of which is itemized below:
· Staking rewards
· Governance
· LP reward distribution
· Utilized for in app purchases within PlasmaPay
· Lending “interest” accrual and distribution
· Hyperloop bridge utilization fee
Lesser known to many is the number of strategic partnerships Plasma has already cultivated; given the project’s trajectory and ambitions, I seriously doubt this trend is anywhere near completion.
Some of the partnerships formed thus far are as follows:
· AllianceBlock ($ALBT)
· Bondly ($BONDLY)
· Bridge Mutual ($BMI)
· Casper ($CSPR)
· Geeq ($GEEQ)
· Injective Protocol ($INJ)
· NEM ($XEM)
· Orion Protocol ($ORN)
· Ren ($REN)
The Plasma team is made up of approximately 25 Development, Operations, and Marketing personnel. Plasma is headed up by Ilia Maksimenka (founder & CEO) and Evgeny Fedorov (cofounder & CFO). Ilia and Evgeny share a strong and clear vision of bringing DeFi to the masses. In a recent Medium, Ilia shared his thoughts on cryptocurrency’s role in paving the way for a more equitable future for all:
When I first encountered cryptocurrency I immediately realized its potential to even the playing field between big institutions and individuals. From my past entrepreneurial experience, I learned how existing financial systems rarely benefit anyone other than an elite few, but in decentralized finance I see a means of empowering the many. Having spent many successful years working in business and IT, I began to consider how I could make my own positive contribution to the field, and consider how I might drive the sector further forward.
In yet another Medium, Ilia provides insight into the ultimate vision of Plasma.Finance:
I created Plasma.Finance to reflect my vision of a future in which everyone is free and free to make the financial choices that suit them best. I see a day in which we will live a fully self-sustainable digital society.
Kyle Chasse of Paid Network (ticker $PAID) also joins Plasma as a key strategic advisor. In viewing his prior project involvement, Kyle has a strong track record of picking winners. If history serves as a barometer, his involvement and deep industry connections will help perpetuate Plasma’s continued growth into the future.
Team communication and transparency build trust and are of utmost importance for a project’s success. The Plasma team has kept the community properly apprised on all project updates, partnerships, and future release items by providing an abundance of detailed content via Telegram, Twitter, and Medium. If you have not done so, I suggest following $PPAY sooner rather than later to obtain real time notifications, along with a better understanding of the project’s broad scope and grand vision.
In terms of exchanges, $PPAY is listed on Uniswap ($UNI), along with a number of CEXs. Plans for further CEX listings are forthcoming, so aggregate liquidity will only increase over time.
Let’s now talk valuation. Relative to its DEX competitors, $PPAY sits at a very modest $38M market capitalization. Compare this to the likes of several competitors (Uniswap, $UNI; Sushi, $SUSHI; 1inch, $1INCH), which stand multiples higher, and you start to get a clearer picture of the true price dislocation at hand:
· 1inch $384M MC = ~10x higher
· Sushi $1.96B MC = ~52x higher
· Uniswap $7.02B MC = ~185x higher
Do not forget the Plasma ecosystem does not act in the core capacity of a DEX / DEX aggregation tool like its competitors. The (many) other integrated features described throughout this overview add to its holistic value proposition, and thus further suggest the potential for greater price appreciation. With increased partnership and product release announcements in the pipeline, I anticipate it only a matter of time before the market fairly values Plasma — the scope of $PPAY’s efforts is significant to say the least, and in my strong opinion, the market has simply failed to recognize this.
You can learn more about the Plasma ecosystem via the following links:
If you found this review informative, please feel free to give me a follow on Twitter @Forza_Crypto
Best of luck to all, and happy investing!
The opinions expressed in the blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the cryptocurrency industry.
