Money Code
The future of finance is digital. Welcome to Money Code, the show that decodes stablecoins and the evolution of programmable money for builders, investors, and decision-makers. Each week, join hosts Chuk Okpalugo, Author of Stablecoin Blueprint and Raj Parekh, Head of Payments/Stablecoins at Monad Foundation as they break down the systems and strategies of seasoned operators in the space, revealing the insights you need for better build and buy decisions.
Money Code
From DeFi to Payments: Building a stablecoin-first chain w/ Paul Faecks (Plasma)
Presented by Stablecon Media and Powered by BVNK
In this episode of Money Code, we sat down with Paul Faecks, CEO of Plasma on launching a stablecoin-first payments chain and why distribution beats raw TPS. We cover Tron’s cost creep, pulling USDT into DeFi, token incentives that taper, and Plasma One’s “earn, spend, save” neobank play.
About Stablecon
Stablecon (https://stablecon.com/) is the premier gathering for those at the intersection of DeFi, economic policy, financial infrastructure, and institutional integration, and those reinventing global commerce.
By convening the brightest minds in fintech and crypto, Stablecon provides attendees with world class thought leadership and fosters unparalleled networking and strategic collaboration across the digital payments industry. Whether you’re building, advising, or navigating this new frontier, this is the room where it happens.
About BVNK
BVNK is the leading provider of stablecoin payments infrastructure, helping businesses move money faster, settle globally, and even launch their own stablecoin products. Head to https://bvnk.com/ to learn more.
Connect with the Hosts & Guest
Chuk Okpalugo: LinkedIn, X, stablecoinblueprint.com
Raj Parekh: LinkedIn, X, monad.xyz
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We don't actually think that like block space itself is really kind of the compelling thing you have that gives you value as a chain. I think it's very much kind of distribution ecosystem, liquidity, stable coins on the chain. Tron is winning based on distribution, network effects, connectivity, omnipresence. I think that is what gives Tron value. I don't actually think Stripe has value because of tech. It's also a kind of massive network effect scale business. And I think Plasma is is very similar, actually.
Chuk Okpalugo:This is Money Code. It's a show where we decode stable coins and programmable money so that you can better prepare for an on-chain future. I'm Chuk Okpalugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host Raj Perekh, head of Stablecoins and Payments at Monad. How are you doing today, Raj? Doing fantastic. I'm excited for our guest today. Yes, today we're joined by Paul Faecks, CEO of Plasma, recently launched on mainnet, a stablecoin payments chain. Really, really excited to get into the recent launch, what it takes to get into mainnet, and just how to grow in the blockchain world, particularly when it's a use case-specific chain. So lots of exciting things to get into today. But before we dive in, a quick note. Money code is brought to you by Stablecoin Media and powered by BVNK. The views and opinions of the host and guests are their own and may not represent their companies. And nothing we discussed today constitutes investment advice or any other form of advice. Okay, let's dive in. Uh how are you doing, Paul?
Paul Faecks:I'm doing well. Thanks for having me. Um I've been looking forward to this one, and it's uh it's good we we we're finally doing it.
Chuk Okpalugo:Yes, I was just gonna say you must be super tired from all of the hectic, busy pre-launch, post-launch events after the recent successful launch.
Paul Faecks:Oh, it's fine. I I I got I got a weekend of sleep um um recently. It's been a couple of very full weeks, but um it's also been very fun.
Chuk Okpalugo:That's awesome. Um before we dive into all the the details, how are you feeling? How how is it going? I think uh uh if you spend time on Crypto Twitter as I do, it was kind of wildly uh renowned as a very successful mainnet launch, and those things are hard to come by. And I think uh just from all of the various moving pieces that need to get done, um, the work that goes into which is tremendous, the number of partners need to coordinate, it seems to be a very successful launch. So so congrats.
Paul Faecks:Appreciate it. Yeah. I mean, it's always so many moving pieces uh you you need to kind of orchestrate as as part of that, right? And and you rely on so many things that like are just kind of by its nature external. Um and and so it's it's just kind of a massive exercise in coordinating many things you don't have full control over, um, but you still kind of need to get them onto a timeline and to work together as like one big system. And and we're we're very happy how that entire thing turned out, like but like both from the main net launch um um sequencing um perspective, but then also from a from a DeFi perspective, and actually getting stable coins moved onto onto Plasma and how I mean it's it's it's now been about a week and a half. I mean, um heavily knocking on on wood here. Um but but uh so far kind of the things seem to be working, which we're very happy about. And we're in a in a good position to kind of build build from here now.
Raj Parekh:That's awesome. And and and maybe we could talk about the just like the steps that like led to the successful launch as well. I mean, maybe maybe we can even go all the way back, Paul, and like maybe can you break down for the audience who you know, folks that don't know you, like what your I think the origin story of you know yourself and then and plasma and how it came about. It'd be awesome to see if we can take the the steps that led to like the overall successful launch here.
Paul Faecks:Yeah, sure. Um I I come from from like uh playing poker. That's kind of initially how how I got into crypto, um, and and then spent a lot of time in kind of all things on-chain, uh mostly on Ethereum and kind of going through really the the kind of very early days of of DeFi and really kind of seeing things grow from not existing to then kind of being extremely large and really kind of the the advent basically of online money, of the lending marketplaces that emerged with compound and Ave and the flourishing um stablecoin um ecosystem that came out of that as well, um especially like the the whole algo stable um era of the early DeFi days, all of them mostly horrifically designed products, but somewhat fun to play. That's kind of initially how how I got into crypto. Um then built a different company very much on the institutional space, um, but but but also in crypto, kind of helping large institutional players um basically manage liquid portfolios of crypto assets. And then I think I mean with kind of looking at the chain landscape, and it's it's kind of staggering, right? Where you you do really have two chains that just absolutely dominate stable coins and nothing else really matters, and then that's Ethereum and Tron. Uh everything else is just very, very, very subscale in comparison. I mean, and I think that creates a very interesting kind of dynamic to an extent because I think both of them have their own set of issues and and their own set of challenges. And I think you you do have a massively changing stablecoin landscape. But stablecoins didn't really people generally way underestimate like how how recent stable coins are as a phenomenon of this scale. Well, like pre-2020, stablecoins were like single digit billions in in in total outstanding supply, right? And and so um, this is really kind of a last four or five years phenomenon. And I think a lot of the kind of things around that reality haven't haven't really moved. And I think that that creates quite a sizable vacuum where you can, in our view, and then Plasma is kind of a an expression of that, where you have so much kind of stablecoin commerce now happening and then and and the infrastructure it it moves on hasn't really been built around the like existence of stablecoins at the scale. And and um that is what we're kind of looking to change as Plasma.
Chuk Okpalugo:Yeah, it's funny. The there are a lot of chains. And thinking through where stablecoin market cap is today gives you one set of questions and answers, and then thinking where the transfer volume is gives you a slightly different answer. And then when you break down that transfer volume by size and using size as a proxy for whether that is retail, consumer, P2P versus settlement between institutions, maybe those institutions are trading institutions on exchanges, or whether they're the larger and more kind of wholesale type money movement, um, gives you a very different picture for where stable coins are actually at scale today. And as you mentioned, um, when we're thinking about, I guess, what a lot of people, a lot of listeners are thinking about, which is retail and peer-to-payer payments, uh, Tron still has the lion's share of that volume. And it's been like that for a long time for many reasons. You know, the credit where it's due, there's first move advantages, there's network effects, there's you know, partnerships with Binance and so on. Um, but is that the future? And thinking through all the different things that are uh potentially uh too expensive or not fully accessible to lots of other financial services, that opens up a potential for, hey, there's a way we can do this better. And there's a way we can open this up in a way that's more, even more accessible. How do you think about drawing from Tron or doing what Tron is doing but better and pulling away from those network effects?
Paul Faecks:I I think the the answer to that is is somewhat complex. I think on one hand, this is a kind of massively growing and expanding pie. Um I don't think kind of the entire Phasma strategy isn't predicated on winning against Tron, really, because I think that that is kind of Microsoft didn't set out to like win against IBM. Um and I think this is kind of a a somewhat similar situation, probably. I do think, I mean, as you say, I think the dominance of Tron is a result of a lot of kind of past dependency of the early crypto days, where um they worked with Binance very closely, very early on, and and kind of grew alongside them. I think they are extremely good at local distribution. Well, like wherever you go uh globally, basically, if you can use stable coins, you can usually use USDT on Tron. Um and then so Tron obviously also kind of grew alongside USDT. Um I think one kind of thing that isn't kind of as as widely known, Tron is actually very expensive now. If you look at the kind of cost to send a TRC20 to transfer and then USDT is a is a TRC20, it varies between $1.50 and $4. Um, and and and then that is actually very meaningful, right? That prices out things, that makes things very unprofitable at scale if you if you really want to do them. I think that that's one massive component. I think on the other hand, you you do have, I mean, like this is not like uh not that interesting of a topic to kind of go in depth on. Um, but um centralized exchanges obviously matter an incredible amount as as kind of distribution um um hubs, really, because you you do in the end, like any blockchain, no one really uses a blockchain kind of as a true consumer, like the the a blockchain go-to-market to an extent always has to be a kind of B2B2C play, even if you're kind of targeting consumers. Um, because no one like no one spins up an RPC locally and and then kind of sends transaction hashes into the void, but you do use front ends and you you you do use kind of basically secondary infrastructure to interact with a blockchain as a consumer. And Tron has a very long list of massive disadvantages in that context. I mean, a very large lending market wanted to deploy until they found out that it's literally just not viable given uh the state of their kind of uh gas uh situation they have, um, and and you have this convoluted kind of energy concept, um, which I think leads to many complexities and many issues. Um so uh for me, like I think we have very high conviction that like Tron is Tron is going to stick around, but but Tron is not going to have the same dominance in two, three, four, five years. And I think this is very much a long-term game, obviously. But I think you you have a growing pie and you probably have like the market leader taking a smaller slice of a larger pie, which just is is a massive opening.
Chuk Okpalugo:Yeah. And it it seems like there's lots of different ways to attack an existing network or just to grow in general. When you think about the net new use cases that are out there, some of the use cases that aren't new overall, but maybe new in the Tron ecosystem and maybe limited just by the fact that there's a mismatch of where the capital is and where the latest kind of set of open source latest technology is, which is EVM and EVM compatible. And so there's the idea of, okay, well, we'll eventually we can create a thriving USDT ecosystem elsewhere.
Paul Faecks:100%. I mean I think I think USDT has actually been has actually been um like USDC dominates DeFi right now. I don't think there's many great reasons for that. And and I think that is also to an extent, I think something we've we've done pretty well at, and then kind of um depending on how you currently, Plasma right now has uh the the kind of largest USDT on-chain markets, um specifically on the lending side, um, where I mean we we have more USCT than Ethereum mainnet has right right now. And I think that is also I think one of the kind of very large um imbalances uh in in on-chain markets is just how dominated they are by USDC, which I think is changing, obviously. Um but USDT just fully dominates anything that is like the true use case of a stablecoin, which is cross-border, peer-to-peer, real payments. Um USDC usually is way more stale uh and held by kind of large institutions that get very generous, like yield, ref share. And so they're actually two very different products to an extent. And I actually I think it's way more natural for USDT to be very dominant in in DeFi. And no one has really, I think, been focused on that as an ecosystem. And it's something we obviously be very focused on. And I think that is also something that um is a kind of it's just an imbalance that is like looking to be that is looking to be balanced. I think we're and we're kind of on a good path to towards balancing that.
Raj Parekh:Yeah, that's actually pretty interesting because you know, I think one of the things that um is oftentimes like you know, the the notion of a payments chain is still like being defined as we speak. And yes, um, you know, for folks like yourself at Plasma, you guys are deciding on that path as well. But you I think you bring up like a really interesting point where the DeFi part is is actually important. It's actually been a pretty big part of your strategy as well. But maybe if you can break down like why this imbalance of tether um as like an opportunity, but also like what does that actually mean for creating a payments chain as well? Like it it feels like there could be two perspectives here. Like, you know, DeFi is all about trading. Like, what does that have to do with payments also? Like, maybe if you can break down like the importance of of DeFi and and Tether here, and then also how's it how it relates to plasma as a payments chain?
Paul Faecks:One component here that I think is is is kind of um important to to highlight is kind of DeFi is like obviously one of the building blocks of of a of a payments chain experience. I don't think it's like the one thing that that gives it value, it's the necessary but not sufficient component towards having like value as a payment ecosystem, basically. Um I think the the the three core components of of like what people are looking to do with stablecoins are kind of the earn, spend, uh, and and and and save. Uh and I think DeFi kind of underpins um all of them to an extent. But it's also about like what kind of DeFi, right? Where we have a very good relationship with Binance, obviously, and then that there's a pretty large kind of uh campaign with them where users can can deposit US CT straight into kind of on-chain markets on Plasma, which actually until today stands as the the largest kind of CFI, DeFi, DeFi mullet type product that exists. I mean, it's it's way larger than uh than than Coinbase and Morpho. And I think that is really kind of one of the ways having extremely deep DeFi liquidity is very useful towards building a payment ecosystem around that. Because payments obviously also involves holding assets you then intend to pay with, right? Um like you you you can't pay if you don't have some sort of balance. Um and and obviously you want to earn yield on that balance or kind of do something while while while it isn't in movement. Capital isn't always in movement. So you you need a way for like capital to to just sit there and and not be unproductive. And then you need very good ways to send it from A to B in a payment context. Um that's kind of the very naive, very kind of dumbed down version of how how we think about this. And having a very robust, very kind of liquid DeFi ecosystem solves for one of those two components, which is the you have capital that is sitting in an ecosystem that is kind of not currently used to be in flight. Um, and and that obviously needs to be deployed in a in a capital efficient manner and having deep DeFi uh and then also having those kind of centralized integrations where it's it's very easy to interact with that chain and and you can move capital easily in and you can easily move it out. I think those are obviously key components to then also enabling payment use cases around that.
Chuk Okpalugo:Yeah, I I think that's a good way of putting it. Payments don't live in a vacuum. And so if you you always need to think about how does sand, spend, and save all fit together so that the payments has a capital, in other words, uh others gonna call it sources and sinks to start from and go to. And so as we're getting into the kind of conversation about payments and DeFi, before this year, the concept of a stablecoin payments chain wasn't really talked about. I mean, the folks building on it were we talked about it. Right.
Paul Faecks:I mean, um it's a like uh the the the amount of like the we we had to defend ourselves for this so much. I mean, every VC I spoke to, everyone I I spoke to, it's always I mean the the the core premise of every conversation I had was always why do you need a chain for stable coins? Why do you need a chain for payments? Uh why not just like do this on like a generalized chain? Um why focus on this? And it's it's gratifying to see how validated and and how consensus that that that has become. Um I mean people assume like that's always been consensus. It very much hasn't. I mean, I I can I can't tell you the amount of people um that that that I've spoken to where like the the kind of core component of the conversation was just why does any of this make sense? And like why do you need a chain for payments? And I mean now you have Stripe building one, right? Which is one of the largest payment companies. And and I think that the kind of core thesis of you can kind of selectively focus on on one very large, very strong use case of crypto. And I think stable coins are probably the most interesting one. Um and you can kind of build an entire chain and ecosystem around that. I do feel like that's been pretty validated now.
Chuk Okpalugo:Yeah, no, for sure. Uh and it must be very gratifying to see that being validated.
Paul Faecks:It's also competitive, right? I mean, that there's very sharp people who are also thinking about this and then who are also working on this. And so it's it's always a bit of a double-edged uh sword to have this validated. Well, like it does have certain advantages to like be the only one going after something. We very much aren't now.
Chuk Okpalugo:And it's a massive, massive market with lots of different use cases. And so and so each one will need to find their own positioning. Um but for the early VCs who weren't quite sure, or those uh who are also listening who aren't quite sure, maybe you just explain either the early patrol as it has evolved today. What is the payment chain? Why is it needed?
Paul Faecks:Aaron Powell I think for us the the core Cesis has has always been if you focus on stable coins only, which I think is the largest and most interesting kind of PMF feature that the crypto has found next to speculation. I think those are really the two main things that work at at scale in crypto. If you focus on on stablecoins selectively, you can make very different choices, both on the tech architecture, on the ecosystem building, on the product you build around, on liquidity, basically on everything. Like you if you only think about this one kind of core use case, um, you can make very different choices than if you have to kind of service everything and just kind of be a a very generalized ledger. I mean, um I'm Rash, I'm realizing you are at Monad, and I think you you guys um are kind of going down a different path and probably have have a different view on on that. I think like both both have value, obviously. I think like generalized chains do have value and I think do make sense. But there is an advantage you have in just being focused on on just one thing where you only need to like worry about this one kind of use case being extremely well serviced on on the chain and the ecosystem you you you you build. And I think we've we've also just kind of shown that this works to an extent, right? Where like you can do these C5, DeFi type partnerships and and and you can now kind of progressively onboarding actual payment players to move flows on on Python. I think all of that is only possible because we do not have to think about gaming and and meme coins. We can just ignore all of that. Not not to say this doesn't have value, but it's not something we think about ever.
Chuk Okpalugo:It's all about the trade-offs. And it sounds like, you know, from all looking at the other kind of five or six different teams building payment chains or stablecoin chains, it's throughput, low costs, reliably low costs. So you mentioned you know, meme coins and other things. It's all related to the noise neighbor effect and kind of make sure that my payments are or stablecoin transactions are always you know coming at a reliably low price. No, you also mentioned DeFi as part of the early conversation on saving and as well as spending. What other necessary conditions are there to be a payment chain?
Paul Faecks:I think you you you do need deep stablecoin liquidity, both on the on the kind of swapping, so swapping one stablecoin to another. I I'm a firm believer in a multi-stablecoin world. I don't think, I mean, look, USDC has very much one on distribution and liquidity. I think it's going to stay very dominant. But you still have a kind of wide ecosystem of stablecoins, obviously. So you do want to like very easily convert between them without losing a lot of value in the in that conversion, which is just a function of liquidity. And then on the kind of yield save side of things, you you do you do want lending markets, you you do want kind of things to do with idle stable coins. And and you also want to be able to do that at scale, right? But like you don't want like this needs to work for millions of users that like move billions in capital into that. And and and that actually requires like very, very robust, very large on-chain markets to to actually facilitate that. And so if you want to actually have like a very broad user base that uses your product for payments use cases, the like necessary component of that is just very robust, very deep, very liquid markets on on-chain.
Raj Parekh:Yeah. And it kind of reminds me of just like the traditional markets today. You have, you know, the FX markets, you know, you'd argue in the traditional world, one of the most deepest, you know, liquid markets out there. But because it's actually liquid and efficient, it can actually like lead into payments afterwards. Um it's a I think it's a good parallel moment to what you're describing, but DeFi liquidity for plasma. I think you also mentioned uh, you know, the focus from a go-to-market standpoint. You guys can be exclusively focused on on stable coins. You know, for me, at least I'm on ed, I'm like the one focused on stable coins and payments. And so it's like a dedicated vertical. I would say, like, you know, for me, what I found is like the the characteristics of a chain is really important where you have high throughput, you have you know predictable low gas fees, uh, you have subsecond finality. It's like you're you're basically solving a lot of that as well at Plasma. Maybe if you could describe just like you know, a combination of this go-to-market focus plus like also you know having some of these characteristics, like maybe you can describe like how you guys designed the actual blockchain itself and like how has that led to being like the the best chain for for stable coins. And then also just maybe talk about the longer-term product roadmap because we haven't really talked about Plasma One yet, but there's obviously like you know product launches you guys have done around it. But maybe describe just like the characteristics of the chain specifically designed for it, and then maybe we can talk about the longer-term roadmap as well.
Paul Faecks:I think I mean you you you you actually summarized the kind of main components like extremely well. So actually, I I don't have that much food to add. I think you you you need to be you need to be fast, you need to be scalable. I mean, look, Monad is is is going to be faster than Plasma, and we like fully realize that and and accept that. So I don't think this is like a like you don't need to be the fastest or the most high throughput. I think you need sufficient speed and then sufficient throughput. Um and then it kind of comes down to everything around the just kind of core, like do you have sub-second finality? Can you hit like a couple thousand TPS? You need that. If you don't have that, you you you have no chance to play. If you have that, you have a chance to play. You don't have a right to win. So that's kind of the the probably somewhat reductive um view I have on that. So for us, it's about kind of how can we how can we build things around just like the core chain? Because my I'm I'm running a blockchain, right? But I think the like cursed and block space is the new oil. Like you you all you need is like infinite, free, easy block space, and then like everything else solves itself, and like you're a multi-billionaire now. I think that that's mostly wrong. Um I think you you just have this. I mean, as as as Chuck said, there's a lot of chains. I think there's going to be more chains and more chains, and like that you basically have infinite dilution on on just kind of chains and and uh as a result on block space. So I actually think block space itself is is not all that valuable. Um and I think that the value probably goes down over time and and probably like slowly approaches zero. And and then so it's about kind of what can you build uniquely around that? And and and and what can you do to actually kind of durably have value that isn't just here's an execution environment, go send transactions into it and we'll charge you gas fees for it. That's also, I mean, we we have the gasless USDT transfers, for example. And that's very much in line with our thinking on like we don't actually think that like block space itself is really kind of the compelling thing you have that gives you value as a chain. I think it's very much kind of um distribution ecosystem, liquidity, stable coins on the chain, um massive network effects. I mean, you you like the this entire thing is kind of an exercise in in network effects where you just need connectivity everywhere. You you need omnipresence to an extent. Um I mean, Tron is objectively horrific tech, right? Tron has massively won stable coins so far. I don't think durably, because like the world has like moved a lot since. But um Tron is winning based on distribution, network effects, connectivity, omnipresence. I think that is what gives Tron value. Um and I think that analogy holds into the future. Well, like it very much is basically, I don't actually think Stripe has value because of tech. It's also a kind of massive network effect um scale business. And I think Plasma is is very similar, actually, where you do need, you need to be integrated everywhere. And I think actually crypto native centralized venues matter way more than most people give it credit for. Where if you look at how much volume these like non-crypto native stablecoin payment players are actually doing, except for BVNK, who are a sponsor of Shark, so we we we love them, obviously. But um, if you look at how much volume BVNK, Zero Hash, uh uh Bridge are doing combined, it's it's growing. And I think they actually like they matter more over time, obviously. Binance is doing probably two, maybe three, or it doesn't matter to more um stablecoin payments volume. And so I also think that like connectivity and omnipresence on centralized exchanges are like a kind of massive value driver you you you have. Um and I think all of that kind of comes together in one thing. And then that also very much ties into, sorry, Raj, I'm getting back to your question for my like very long rant. Um I think that that that ties into into into how we think about product going forward, obviously, right? Where we're like you can build kind of more and more features that are kind of specifically catering to those needs. I think the gas as us CT transfers are a component of that. Um, then kind of increasingly confidentiality um on payments, I think uh a massive, massive pain point to that holdback, kind of true payment volumes right now. Um I actually think Bitcoin is still very underutilized in this whole context. But like it's very clear that people like to save in Bitcoin, but spend in USD denominated assets. So I think building kind of elegant solutions for for kind of that sort of activity, I think, has has a lot of value. Um and then for us, like it's it's also very much on the distribution side of things with Plasma One and kind of having um having products that that are kind of truly like that that use the massive advantages that stable coins have to kind of bring it to a neo-banking-esque uh experience where you can kind of really use the kind of stablecoin rails that you've built underneath and the DeFi, the liquidity, the connectivity, all of that um to kind of really tie that into one product that then is meaningfully better than kind of any non-stablecoin based like neo-banking experience. I think all of that kind of comes together as like one product in the end, where like you have all of these puzzle pieces and like you need the deep DeFi liquidity on-chain for Pasma one to make sense. Uh, but you also need the connectivity for and like all of this kind of meshes into like one big value proposition, I think.
Chuk Okpalugo:Yeah, I think it's uh a good example of verticalization. Um we're seeing it work differently across the different teams who are building either general or stablecoin specific chains. But in this case, you've gone directly to the end consumer. Okay, let me just provide the value directly.
Paul Faecks:100%. And you you're seeing that's demand. I mean, we have no incentives on on this. And we we we crossed 100,000 signups on the the wait list for for plasma one. And then like and we we put one tweet up. And so like I think like that is such a like distribution power you you need to harness and and you need to kind of channel into kind of ways that are value accredited.
Chuk Okpalugo:Yeah, maybe maybe let's just break down Plasma One for those who don't know who it's for and what the key benefits are.
Paul Faecks:Sure. We very much view stable coins as like truly being money 2.0, just kind of our our our cat phrase on on that. And I think it's very true. I think it's truly kind of the next evolution of money. But I think that's only true if it's like highly usable and then and you you can actually kind of interact with it in in a way that isn't convoluted and complicated. And and so Plasma One is our neo-banking experience that we've been working on, and which looks and feels like a non-stablecoin based bank, but like in the background, all of it is stablecoin kind of built. And and so that obviously allows for a way better product, especially on the kind of cross-border payment side of things. Um you you can the three components are kind of back in play for for Plasma Run, right? Like what you want to save, you want to spend, you want to earn. And like all of that is a component of Plasma One. And I think we can we can build the kind of best neobank-esque experience for kind of end consumers to actually interact with stable coins daily. And that obviously also requires building a lot of the kind of payments infrastructure underneath ourselves and and in-house, uh, that then also kind of other partners can work on and and and and work around. So it's it's also just kind of one example of a product built on plasma payment rails that is going to work at scale, uh, that that also kind of opens up avenues for other people to to to build kind of similar experience around it.
Chuk Okpalugo:And and so for those who don't know, you know, it's really slick uh mobile app. Uh you've got you can save 10% via DeFi, then you've got a Visa or MasterCard connected cards for spending globally, and then obviously you can be make. Payments on Plasma. Is there anything else you can share about the roadmap for that of that product? Presumably, you're going to need to be able to bridge on and off from other chains to kind of collect uh supply, have an access to DeFi and other things that people might want to do, such as trading and lending. And maybe you can talk about what else is coming in the Roma for the Plasma One.
Paul Faecks:Yeah, I think I think the most interesting piece of all of this is obviously kind of the first and the last mile. So like the on-ramp and then the off-ramp, or like the on-ramp and the kind of actual spend where like a consumer spends with a merchant. And I think that is where the difficulty is highest and the complexity is highest. And so that's been something we focus quite a bit on. And then we're kind of acquiring regulated infrastructure in jurisdictions where we feel like that has value and that makes sense. That obviously allows for then a way better experience, specifically on kind of the first and last mile aspects of this. And we're integrating all of that into Plasma One as kind of one holistic product offering, basically. And plan to serve it out this year. It's going to be a bit of a stage rollout. It's likely not going to be like fully publicly available to everyone this year. But there's going to be a kind of a stage rollout where we probably have a wait list and kind of gradually open it up as kind of capacity scales, basically.
Chuk Okpalugo:And are you able to share where you might start geographically? Or is there a geographic focus?
Paul Faecks:No, it's going to be global on day one. I think you do have jurisdictions that that obviously I think the unlock is greatest. I think that is overwhelmingly not the US and not Europe, where you do have quite robust banking infrastructure and you don't have this kind of true like horrific experience to like, wow, this is fantastic a moment. I think that is probably mostly the case in kind of non-Europe, non-US jurisdictions. Um but I think we're on 52 countries on day one. It's going to be global. The experience obviously like varies slightly depending on local currency. Payments is such a kind of complex web of like interdependent parties involved. And then some of those we will kind of do ourselves, some of those we will we will partner with with kind of others. Um and so the landscape doesn't look exactly the same everywhere, which is true for every payments product, right? Um but um um it's it is going to be global on day one.
Chuk Okpalugo:I guess that means you're spending a lot of time stitching together on off ramps, each with their own own local jurisdictions, local regulations.
Paul Faecks:Or or building them ourselves or acquiring them.
Chuk Okpalugo:Right. And so this is really you know full fully going down the path of verticalization here, where essentially by the end of it, you'll have all the kind of pieces of an orchestrator, of a mobile application, um, and default integrations and maybe other things along the stack as well. Um, but starting with a chain, uh but making sure that you can you know drive with the real-world use cases versus um existing approaches which are kind of driven more by bringing folks to your ecosystem. You're actually starting with the end user. Oh, and it was that yes. Yes. Okay, so I think this is a good time to take a quick pause to thank our sponsors who make this show possible. Every business needs a stablecoin strategy. And if you're looking for the best place to start, that's BVNK. BVNK is the world's leading provider of stablecoin payments infrastructure, helping businesses move money faster, reach new markets, and even launch their own stablecoin products. Global licensing and compliance are covered, so you can build with confidence. Learn more at bvnk.com. Okay, perfect. Thank you for our sponsors. So one of the things we were chatting about just now, I'm really curious to get a bit deeper in is how are you going to grow? How do you grow adoption? This is a question for any chain, um, specifically also payments chains. Uh yes, you have the application, Plasma One app, it's going to focus on consumers. And then you you've mentioned partnerships with Binance, you know, it's already the leading kind of DeFi mullet. Uh, can you talk through how you're thinking about growing adoption in general?
Paul Faecks:Sure. I think adoption kind of boils down to two main components, which on one hand is distribution, and on the other hand is network effects, uh, which is uh like somewhat uninteresting answer. Uh because like obviously, but I think that that's kind of the simple and most true answer you you can give. And I think both then obviously have like a long list of kind of secondary components to them in terms of like, yeah, of course you need distribution, but like what what what does that mean? And I think for us that that means kind of being in all the places where consumers are already, um, which is kind of both crypto native and non-crypto native venues. Um and then also kind of growing the network effects. Well, like those two components are actually pretty, pretty connected, especially in payments. Payments are always two-sided. Well, like you have someone who's paying and someone who's receiving, and you need both of them to like agree on a common rail to do that, because otherwise it doesn't work. And so it's very much kind of building a two-sided marketplace. And you you do obviously run into the kind of chick-in-the-neck issues you always run into what when you build two-sided marketplaces. And then so I think the the really kind of main growth driver is how well and how quickly and how aggressively can you solve this kind of issue of of chick-in and egg, where like you need you need both to be present to have value, but one doesn't really want to show up without the other. I think we we we've kind of solved that on on the DeFi liquidity side pr pretty well. And I think we're on our way to solving that on the payment side of things. Um I think the end consumer distribution play, I think, solves a lot of things for us there, which is also why we're kind of going for that. We use Plasma One for us as a massive distribution wedge, uh, obviously. Um that I think also opens a lot of other doors for us to kind of build experiences in in in in the back end um there that then are likely more kind of B2B focused than Plasma One is. Um and I think getting all of that right is is is obviously very, very hard. But um I think that is kind of the most valuable and the most interesting path to go down.
Raj Parekh:Yeah, that's that's super helpful. I mean, just to make sure I got this right, but just to summarize, it sounds like you know, start with the blockchain, get DeFi liquidity going, get Plasma One as like the key neo bank. And maybe just to build on that, like what what are the expectations of of ecosystem growth just to continue to build off of that? Because there could be a world if I'm a you know early stage startup and I'm interested in building uh a neo bank on Plasma, I'm like, well, this is probably not the place for me to build because you know, Plasma is dedicating a lot of their resources to Plasma One. But you know, how do you think about like the juxtaposition of having new companies build in the plasma ecosystem versus competing with them with like your own products in the ecosystem as well?
Paul Faecks:I mean, look, Stripe owns Bridge and Stripe is definitely launching their their own stablecoin and then they're also doing stablecoin issuance as a start person. And so I think in crypto is pretty common to kind of have these such a massively growing pie that I think Plasma One doesn't take away from anyone else who's building things. I mean, we have a fantastic relationship with EtherFi, who I think have done incredibly well in in building a kind of card-based payments product now, and then like a lot of that actually is is on Plasma now. And so I think we're always extremely keen to kind of see see people build payment experiences on Plasma. And uh we we spend a lot of time with a lot of teams who are doing just that. And I don't think Plasma One is competitive to that, but like specifically given that Plasma One is basically the front end to the core payments infrastructure that we're building. So it's really kind of the the one like customer at scale for like the the Plasma pay product and underneath that then everyone is capable of using. I think it's actually a net positive, right? Because like on one hand, we're kind of betting on our own payments infrastructure and then using it for our own product that we kind of put our name on and then we put kind of like everything we have behind, obviously. And I think that also gives external parties the confidence to also build on it. And and then so we don't set out to be competitive with anyone who who's building things on Plasma.
Chuk Okpalugo:I think that makes sense, right? It's this is a the challenge of of verticalizing in payments. Uh FinTech in general, but payments especially, I think it's very common in traditional payments and traditional finance that there's this concept of co-petition where you look at all the players, they all kind of use each other in a certain way. They're competing, but they're also partners. And I think uh it surprised many people to see that happening in crypto, which can sometimes be a little bit more competitive. Um, but that's just the way that these things work. And so if you take the the view, like something that you mentioned earlier, it's a very growing pie, right? There's certain areas where you might compete, and there's other areas where look, the the pie is big, it's growing. Um, we're gonna go after this market, you're gonna go after that. And if where we overlap, may the best person win. And I think that's just that's gonna be part of it. And there are other aspects, I guess, of infrastructure that you are either building or not building, but you're bringing people in to be part of this ecosystem. And one of the key aspects of that is incentives. Uh and one of the key drivers of incentives or one of the key elements of incentives throughout chain is a token. And so XPL is a token for plasma. It has been a pretty interesting thing to watch purely as a person who's interested in just developing ecosystems plus incentives, plus building plus tokenomics. Um, there's the deposit-based fundraising approach that got initially that 1 billion of liquidity matched with a billion elsewhere on Binance, plus the token sale. Then in the first couple of days, it was 10 billion of stablecoin deposits onto plasma within the first couple of days. Maybe you could talk a little bit about the role of a token in distribution and growing an ecosystem.
Paul Faecks:I think you do have a massive advantage in in having a token, obviously, um, because you can you can use it to kind of bootstrap liquidity in in in places where where it's very value accretive to the ecosystem, and you can then kind of taper off those incentives. And as soon as you've grown, specifically on the DeFi side, really what you're looking to build is a kind of very robust base of borrowing and and that obviously. I mean, again, you can use a token to like solve some of those chicken and egg issues. It's interesting because I don't actually think it's been done successfully all that many times. If you look at a lot of the other kind of rollouts of kind of new DeFi ecosystems, um I actually don't think many of them work. We've taken fairly opinionated approaches to many of those, many of those things, which on one hand is being quite concentrated and quite opinionated on like what you actually incentivize. I think the whole like it's kind of ironic because I had to tweet that we aren't the BLAST team because people kept telling me that we are, even though we very much aren't.
Chuk Okpalugo:Can you explain to people what yeah, what the BLAST situation is?
Paul Faecks:Yeah, I mean look, I think I think BAS is I want to get back to the BAS because it actually makes sense as an argument in answering this question. I think BAS is actually probably the polar opposite of I think the strategy that that is a winning one. BLAST strategy is basically the you get as many people as possible to build on your chain, and you end up with like 18 different DEXs and like seven different lending markets. And like Plasma is fully promotionless. Like that there's a lot of things being built, and there's a lot of really interesting and really cool things being built, obviously, as like the core components. I think we we've been very focused and very opinionated on like Ave is like the core liquidity layer in the middle of it. And and then we work closely with Fluid and we work with Balancer, and then we we work with the other like you want to be very blue chip focused, where you have like extremely well-functioning kind of blue chip, fantastically working like infrastructure and great teams. And then like you can build things around that in kind of areas where that doesn't really exist. And I think that is kind of actually a go-to-market that like no one has really had, and in my opinion, at least like not at scale. And I have high conviction that is the correct path to go down. Well, like, yes, you can like build some compound Ave fork with an external team, but like Aave is going to be better, right? Mark Zeller beats the Mark Zeller clone any day of the week. Uh, and and and I think that's very much the bet we're taking. And so I guess to to help folks understand the the progression here, it's a combination of being very specific and and also just incentivizing things that like have like then that like you need a path for it to turn into an organic ecosystem, right? But like you obviously you can't just incentivize forever because like that doesn't lead to great places. You need to specifically use incentives to like solve the day one chicken and egg issue of not having liquidity to solve that, but you need to like very quickly transition that into building kind of markets that are sustainable without incentives. And I think that like the the goal of incentives has to be that you can you can wane them off as soon as you feel like you are in a position where they are no longer needed. And like the quicker you can get to that, the better. And so like you don't want to forever incentivize because you just can't like it just doesn't make sense.
Chuk Okpalugo:Could you maybe describe some of the key aspects of how you've designed the incentive mechanism for sustainable growth?
Paul Faecks:Sure. Things we we've been very strategic in kind of incentivizing things that we we think are on on one hand, sick, and on the other hand, can kind of actually drive liquidity in into the ecosystem that that is then sicky and stays there. Um on the lending side, for example, you need like you need sustainably low borrow rates, really, to kind of have have markets at scale. And that requires a lot of supply that that wants to uncertain yield, and that that isn't just there to incentive farm, but that is basically like just organic supply that kind of lends out balances. And so we've done a lot to to facilitate that. And then we've kind of designed incentives around that, and then we have these kind of C5, DeFi integrations that I think are also a massive component of that. And and so I think that is really the path you you want to go down to. Um where like you can do the TBL deals, you can give people like guaranteed like floor yield and like you have billions on your chain. All of that just slowly bleeds you dry and doesn't solve anything except for like very short-term issues. And then so our entire incentive design is this kind of with the thought in mind. How can we kind of use the kind of short-term incentive to like solve a medium to long-term problem so we no longer rely on it, basically? The exact decisions in that are kind of probably too long to get into, but um that that's something we have spent an insane amount thinking through and and and I mean it's it's uh an ongoing debate basically every day, uh, what that actually looks like uh tactically. But I think the the strategy is is is very clear.
Chuk Okpalugo:Yeah, I think that is actually probably one of the most hot topics. That would make a great masterclass um on token incentivization and token design. So we're gonna do a little bit of a quick fire question round to close out here. So this first one we'll just start as easy. Talking about plasma and maybe plasma one. If we project out five years from now, what does success look like for Plasma?
Paul Faecks:I think we can be the most successful neobanking product that exists globally. I think that there actually isn't that many massively successful examples of this at scale. I think stablecoins will absolutely eat the world, and I think stablecoin payment experiences will dominate non-stablecoin payment products in in in in the years to come. And I think plasma can capture a a very good chunk of that. And and that's that's really what we're focused on.
Chuk Okpalugo:It's like a multi multiple millions, like a global revolute built on Plasma. Yes. Excellent. Okay, so now to content. What are you reading? What are you listening to? Do you have a favorite book or movie or TV show?
Paul Faecks:I'm a big fan of T VPN as a podcast. I just uh think of this because I I listened to it before those. Um, I can imagine. Any poker books? I I like I actually haven't played poker in a in a while. And I also feel like I I would not be competitive against anyone who's even like half decent. Um I think I just get I just get murdered against anyone who's who's actually like at least kind of good. Um because you you do lose your edge like literally very quickly. And so I haven't done much of that. Um I got really into sim racing, but that that that's a whole different topic.
Chuk Okpalugo:Okay, yeah. That's another podcast, it seems. Okay. And then finally, who else in the space do you admire that we should bring on the show?
Paul Faecks:There's a lot of people I I admire in the space. I mean, it's it's kind of insane how many, how many good businesses have have been built. I mean, the easiest person to come to mind is is obviously Paolo Tether, um, who's just kind of built a truly kind of generational business in in my view. Um I think Tether is arguably the best business in in all of crypto, probably maybe in the world. And I think a lot of that comes down to like the team they've built and kind of a a very kind of select view of like incredibly sharp, very, very good people. So I think that that's probably number one. I think besides, I mean, look, a lot of fantastic businesses have have been have been built in in crypto, right? CZ has built an incredible business and and and that that that's very tough not to deeply respect. And and and I mean Brian Armstrong is built. All of those are like very mainstream picks, but um I have deep respect for all of them.
Chuk Okpalugo:No, you're totally right. That's awesome. Well, hey, that's a wrap. It's been really, really good chatting with you today, Paul. Where can the listeners go to learn more about you and Plasma?
Paul Faecks:Our website is plasma.to. We are at plasma on Twitter. Very easy. Um, very happy. We we just recently actually got the ad plasma handle. We used to be plasma ftn. That's been solved, and uh, I'm Paulypunt on Twitter.
Raj Parekh:Awesome. What about you, Raj?
Chuk Okpalugo:You can find me on X at RajFarak underscore and mana.xyz. And for me, you can find me at my writing at stablecoinbullyprint.com, find me on x at chuck underscore xyz, and then LinkedIn at Chuck Archapelliga. Thank you for listening, and thank you for joining the show, Paul. Thank you for having me. This is awesome. Thanks so much for listening to Money Code. There was so much to take away from today's conversation. I learned a lot, and I hope you did too.
Raj Parekh:If you enjoyed this episode, do us a favor, share it with someone you know, or give us a five star rating on Apple, Spotify, or wherever you get your podcast from. Until next time.
