When the Tether-backed, stablecoin-focused blockchain Plasma saw its $250 million deposit vault fill nearly instantly on June 9, the founders doubled the deposit cap to $500 million on the spot. Despite that, the sale was dominated by whales and bots — so much so that a few days later, they raised the cap to $1 billion. That was filled in 30 minutes.
The raise was not a sale of Plasma’s forthcoming XPL token, but rather deposits to win the right to participate in the sale, which was raising $50 million in an initial coin offering (ICO) at a $500 million valuation.
Plasma calls itself a blockchain “purpose-built for stablecoins,” a type of Bitcoin sidechain optimized for stablecoin transactions. It offers Ethereum Virtual Machine (EVM) compatibility, high speeds and zero-fee USDT transfers for simple payments, as well as gas fees in USDT or BTC for more complex ones. It has the backing of stablecoin issuer Tether and its sister exchange Bitfinex, as well as Peter Thiel’s Founder’s Fund, among others.
“One of our main goals for the XPL sale is broad participation,” Plasma wrote on X on June 11, shortly after the second deposit period had been completed — which was done on very short notice.
There was a reason for that.
“After the initial deposit period, we heard from community members who had trouble joining and felt that snipers and bots had too much time to prepare,” Plasma said on X. “We reopened the cap to give those users a better opportunity. The announcement was made on short notice to reduce bot setups and create more room for real participants, especially those active in our Discord and with notifications on.”
Whales Swim in
After the first deposit quota was raised on June 9, X user djma said only 1,108 people were able to make deposits to the first $500 million, and that the top 10 got 38% of the cap.
“Meet your new Plasma whales,” djma wrote. “ICOs are not solved.”
Plasma itself had reported the same number of wallets at the time, noting that the median deposit amount was around $35,000, and that the team was “thrilled” with the show of demand.
The largest bidder in the first deposit period, who received 10% of the allocation, deposited $50 million. Another spent $100,000 in gas fees, according to Etherscan, raising the specter of a gas war like those during the NFT bubble.
“What happened with the Plasma ICO isn’t just about a rush of capital, said Martin de Rijke, head of growth at Maple Finance. “It’s a reminder that crypto’s access problems haven’t been solved.”
He added that, though demand is clear from the amount and speed of the deposits, “when whales and bots dominate the allocation, it sends the same old message: the system is still tilted toward those with the fastest tech or the deepest pockets. If ICOs are coming back, projects need to rethink how they structure these launches or risk repeating the same cycle under a different name.”
After the second deposit period, raising the total deposit cap to $1 billion, the number of participants rose to 2,911, according to Etherscan.
Stablechains Are Coming
Plasma isn’t the only blockchain project focused on making stablecoin transactions faster and cheaper.
On June 5, Stable, another USDT-focused chain backed by Bitfinex, as well as USDT liquidity protocol USDT0, came out of stealth mode and announced that it is a “new Layer 1 blockchain where USDT is the native gas, and peer-to-peer USDT transfers are free.”
Stable, however, is its own Layer 1, rather than a sidechain.
Codex, on the other hand, is a Layer 2 that describes itself as “stablecoin infrastructure fit for business use.” It came out of stealth in April, announcing that it had raised $16 million from Dragonfly Capital, with additional participation from Cumberland Labs, Wintermute Ventures, as well as Coinbase and USDC-issuer Circle, among others.
