The XPL token is fundamental to the Plasma network's economic and security model. Its primary functions include:
Transaction Fees: XPL is used to pay for transaction fees on the Plasma blockchain, although the network supports gasless USDt transfers through a protocol-managed paymaster system.
Staking and Security: Validators stake XPL to participate in the network's Proof-of-Stake (PoS) consensus mechanism, verify transactions, and produce blocks. In return, they earn rewards, ensuring the network's security and decentralization.
Governance: XPL holders are intended to have governance rights, allowing them to propose and vote on key protocol upgrades and changes to the network's parameters.[8]
Deflationary Mechanism: Plasma implements a fee model similar to Ethereum's EIP-1559, where a base fee from each transaction is burned. This mechanism aims to create deflationary pressure on the XPL supply over time as network usage increases.
The total supply of XPL is 10 billion tokens, with a circulating supply of 1.8 billion (18% of the total) as of late 2025. The token distribution includes allocations for ecosystem and growth initiatives, the team, investors, and a public sale, with vesting schedules designed to promote long-term alignment and prevent excessive early sell pressure.
