Plasma’s XPL Token Sees Significant Recovery After Initial Crash
The XPL token of Plasma achieved a remarkable recovery of 113% from $1.93 to $0.7218 after the launch of its Mainnet on September 25. This rebound is notable, especially considering the token’s initial crash, which was likely due to sales pressure from users who received network airdrops and subsequently liquidated their positions.
Overcoming Sales Pressure and Finding Strength
According to reports, users received at least 9,304 XPL tokens via the distribution program, which initially put pressure on the token’s supply as recipients sold their holdings for other assets. However, after the initial sale drained, XPL found the strength to rally, supported by strong fundamental metrics within the Plasma ecosystem. At the time of writing, the token had reached $1.26.
Plasma operates as a stablecoin-focused blockchain platform, backed by prominent investors such as Bitfinex, Framework Ventures, Peter Thiel’s Founders Fund, and Tether CEO Paolo Ardoino. The project raised $500 million in June and attracted over 2,900 wallets with deposits totaling $1 billion during its initial funding phases. Additionally, it has partnered with Etherfi to integrate the Liquid Protocol’s Ethereum Vault, valued at $500 million.
Network Fundamentals and Partnerships
The Plasma network does not support USDT transfers, offers confidential payments, and provides EVM compatibility for smart contracts in the Ethereum style. According to Defillama data, the total value locked (TVL) in Plasma reached $3.4 billion within 24 hours of its launch. This rapid TVL growth reflects the high yields offered by the network to attract initial liquidity and establish a user base.
The DEX volume on Plasma crossed $226 million on September 26, while the stablecoin market capitalization in the network rose to nearly $4 billion. An example of the network’s early traction is the deployment of AAVE in the Plasma network. According to Jack Mandin, a data analyst from Blockworks, AAVE generated $57,000 in interest within 24 hours on the network, surpassing the protocol’s performance on Scroll and Gnosis over a two-week period.
The loan protocol achieved $6,000 in reserve income on its first day, outperforming smaller AAVE deployments over weeks or months. These fundamental metrics likely contributed to XPL’s price recovery as traders recognized the network’s early adoption and liquidity driving capabilities.
Conclusion and Future Outlook
The strong rebound of XPL, occurring in a week where the crypto market has gained 9% in value, demonstrates the token’s strength among crypto investors. However, it remains to be seen whether the token can maintain its momentum in the following days. For more information on Plasma’s XPL token and its performance, visit https://cryptoslate.com/xpl-surges-113-to-all-time-high-following-launch-day-crash/.
