2026-01-20 02:29:42

Plasma's XPL surged to a high of approximately $1.68 on its launch day last September 25th, with FDV easily surpassing the billion-dollar mark, once hailed as the "killer app" for stablecoin payment infrastructure. But what happened next? Just a few months later, the price plummeted off a cliff.

As of January 20th, XPL stabilized around $0.13 (latest approximately $0.132), representing a decline of over 92% from its peak. The 24-hour slight increase cannot hide the over 13% weekly decline, with market cap shrinking to $240-270 million. Ironically, FDV remains high at around $1.3 billion.

Why is this happening? The core reason is quite simple: extremely high initial valuation combined with ongoing unlocking pressure. On January 25th, 89.9 million XPL will be unlocked, worth roughly tens of millions of dollars, enough to cause selling pressure. Early high-yield farming (such as via Aave protocol) temporarily boosted TVL to tens of billions, but the sharp drop in XPL's price directly reduced reward value, prompting large-scale user withdrawals, creating a classic vicious cycle.

Speaking of which, Plasma's technical foundation is indeed solid—zero-fee USDT transfers, 1-second block times, high TPS, Bitcoin-level security. These advantages are all present. The on-chain stablecoin market cap is about $1.9-2 billion, with TVL maintained at $3.3-3.7 billion, showing resilience. The problem is that the transition from yield farming financial incentives to real payments and cross-border scenarios has never truly exploded, lacking a killer app that can genuinely retain non-incentivized users.

The recent trend is quite typical. After hitting a yearly low of $0.115 at the end of December, there was a small rebound, reaching around $0.16 in mid-January, but the unlocking expectations and market sentiment pushed the price back into a narrow range around $0.13. Trading volume hovers between $70 million and $100 million, liquidity still looks decent, but buying interest is clearly weak.

This is a classic case of a high-valuation L1 project experiencing a wave of incentives receding and supply shocks. Short-term, a significant recovery seems unlikely; mid-term, if payment scenarios can truly take off, there is a chance for a turnaround. Otherwise, it will continue to grind at the bottom.

XPL6,47%

AAVE5,54%

BTC0,83%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

16 Likes

Reward
16
8
Repost
Share

Comment

0/400

DeadTrades_Walking

· 17h ago

Another classic case of opening high and closing low, the decline of farming is really a dead end. --- A 92% drop—how much of a sleepwalker do you have to be to take this position? --- No matter how good the technology is, without practical application it's all pointless. I've seen through Plasma on this early on. --- 88.9 million tokens unlocked and dumped—who can withstand this rhythm? Do we still need to keep grinding at the bottom? --- It feels like payment scenarios are just a distant dream for Plasma. --- From 1.68 down to 0.13, with FDV still hanging at 1.3 billion—this contrast is truly shocking. --- When yield farming retreats, the entire ecosystem is exposed. What does that tell us? --- Liquidity is just a facade; weak buying pressure means no one believes anymore. --- The killer move has turned into a cutting move—very ironic. --- TVL can still hold at 3.3-3.7 billion, but can this save XPL? Not necessarily.

View OriginalReply0

ClassicDumpster

· 01-20 02:59

The killer move turns into a slaughtering blade, an 92% drop that made me laugh. This is the routine operation of Web3. The wave of unlocking is here, and we still need to keep pushing. Let's see who takes the bait. No matter how advanced the technology is, without application scenarios, it's all useless. Plasma's trick is outdated.

View OriginalReply0

BankruptWorker

· 01-20 02:58

Another "killer move" has been cut down to twenty taels, from 1.68 to 0.13, hilarious. Unlocking 89.9 million coins and still throwing more in, how is this supposed to work? No matter how advanced the technology is, if no one uses it, it's useless. Yield farming's true nature is revealed once it withdraws. Bottoming out and grinding further? Anyway, I've already withdrawn. Still waiting for payment scenarios to be implemented? I'm tired of hearing that. FDV 1.3 billion, market cap 270 million, how incredible must the numbers game be. Is it time for the farmer's story to be told again?

View OriginalReply0

just_another_wallet

· 01-20 02:55

It's the same old trick again: high startup valuation + farming incentives, and in the end, dumping + fleeing. A 92% drop is too much to bear; no matter how impressive the technical hype is, it can't save the collapse of the tokenomics. Let's wait and see how much the unlock on January 25th will impact the price. The real payment scenarios haven't materialized yet, and that's the fatal flaw.

View OriginalReply0

EntryPositionAnalyst

· 01-20 02:43

It's the same old story. Overhyped IPOs then crushed by incentives and unlocks. We've seen this play out with XPL too many times. Initially hyped as a dark horse in payments, it turned out to be a yield farming vampire. Where are the real applications? No matter how advanced the technology is, if no one uses it, it's useless. That's the real problem. A 92% decline, falling from the throne to the ordinary world. It's almost ironic that FDV still stubbornly stays at 1.3 billion. The market has already given the answer. The days of bottoming out are probably going to last a while. Unless they can really come up with a major payment scenario, they'll just continue to be caught in a double squeeze of unlocks and short-selling.

View OriginalReply0

AirdropHarvester

· 01-20 02:40

Another project that was hyped up and then dumped, the farming returns can't stop the unlocking wave at all. --- No matter how advanced the technology is, without real-world use cases, it's useless. XPL has vividly demonstrated this. --- A 92% drop, it's hilarious. Is this the "killer move"? --- Waiting for January 25th when 88.9 million XPL will be dumped, probably hitting a new low again. --- To put it bluntly, it's just a lack of users. Having impressive TVL numbers is useless without actual users. --- This wave dropped from 1.68 to 0.13. Luckily, I didn't buy in. --- The money from yield farming has long since left; now only faith is holding it up. --- Want to turn things around? Unless there's a real payment application landing, it's just grinding at the bottom. --- High valuation startup with continuous unlocking—this combo is unstoppable. --- Ironically, the FDV still hangs at 1.3 billion, but the price has fallen to the floor.

View OriginalReply0

NestedFox

· 01-20 02:36

Another classic drama of "overestimated valuation + incentive retreat." XPL dropped from 1.68 to 0.13 this time, and I really couldn't hold back; a 92% decline is truly outrageous. The technology is good, but nobody uses it. Once the farming craze passed, the true nature was revealed. The unlocking wave is still coming, so keep watching the show.

View OriginalReply0

SorryRugPulled

· 01-20 02:32

It's the same old trick again, high valuation + unlocking pressure + farmers fleeing, the three usual suspects together, a 92% drop is outrageous. Wait, the technology is really good but no killer app? Sounds like a very smart failure. Why hasn't the 88.9 million XPL from January 25th been dumped yet?

View OriginalReply0