Plasma is a Layer-2 scaling framework designed to improve blockchain scalability while maintaining the security of the main chain (such as Ethereum). Instead of processing every transaction on Layer-1, Plasma uses child chains to handle transactions off-chain, then periodically submits cryptographic proofs (Merkle roots) back to the main chain. This approach significantly reduces network congestion, lowers gas fees, and increases transaction speed.
Security is ensured through fraud proofs and exit mechanisms, allowing users to safely withdraw funds to Layer-1 if malicious activity occurs. By keeping most data off-chain while anchoring security on-chain, Plasma enables high-throughput, low-cost transactions without sacrificing decentralization. The technology is especially suitable for payments, gaming, NFTs, and high-frequency applications.
Within this system, the XPL token is used to pay transaction fees, stake for network security, participate in governance, and reward validators and users. Plasma provides the scalability, while XPL aligns incentives and powers the ecosystem.
