Why Is Plasma Plummeting?

yyc trader & Olivia Capozzalo
October 01, 2025

Happy Uptober, Defiers!

Today’s big story:

• In less than a week, investor sentiment surrounding Plasma’s shiny new XPL token has gone from bullish euphoria to near-panic

In other news:

• Anchorage Digital integrates Jupiter
• Starknet unveils BTCFi initiatives
• SocGen deploys stablecoins in DeFi
• ETHGas building critical infra for Ethereum blockspace [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

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Bitcoin has MicroStrategy. Ethereum has no whale — until now. Michael Saylor turned his company into Bitcoin’s giga-whale, stacking billions through corporate debt and creating a new Wall Street narrative. But Ethereum, despite powering DeFi, stablecoins, NFTs, and restaking, has lacked an equivalent story of large-scale accumulation.

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Learn how Rezerve is turning MicroStrategy into a DeFi protocol.

Read more

We’re back! Here’s what you need to know in web3 today

📈 Markets in the Past 24 Hours

	TICKER	VALUE	24H
	Bitcoin	$116,854	3.10 %
	Ethereum	$4,294.79	4.69 %
	XRP	$2.93	3.46 %
	BNB	$1,020.89	1.96 %
	Solana	$218.11	6.02 %

Today’s Big Story

Plasma Sentiment Sours as XPL Plunges 45%

In less than a week, investor sentiment surrounding Plasma’s shiny new XPL token has gone from bullish euphoria to near-panic after the token dropped by nearly 45% in just four days.

Plasma is a stablecoin-focused blockchain backed by Bitfinex, the sister company of USDT issuer Tether, that launched its highly anticipated mainnet and native token last Thursday.

The XPL token debuted at a $10 billion valuation, and traders piled into the latest “Tron killer,” sending it soaring above $1.6, or a $16 billion valuation, by Saturday.

By all accounts, the launch was a resounding success, with lucrative airdrops for even minor contributions to the XPL presale ensuring that there were few complaints from unhappy farmers – depositing just $1 netted participants five figures in XPL at launch.

Meanwhile, ICO participants netted a minimum 20x return on their allocations, essentially doubling their money deposited in the presale vault.

Then the selling began. Over the course of four days, XPL has plunged by nearly 45% to $0.96 at the time of writing.

XPL price chart

As the selloff intensified, some began to speculate that the Plasma team was offloading millions of tokens through Wintermute, a prominent market-making firm.

While neither Plasma nor Wintermute have commented publicly on the matter, on-chain sleuths have confirmed the movement of large amounts of XPL to exchanges, although it remains unclear if the tokens were sold or used for legitimate purposes.

Meanwhile, Nansen data shows minimal participation from “Smart Money” wallets in XPL, while top traders and public figures have cashed out, according to another analyst. The data also shows that fresh wallets accounted for the majority of new buyers over the past week, indicating potential retail flows.

Nansen data for Plasma

Token performance notwithstanding, Plasma has quickly established itself in DeFi, attracting nearly $6 billion in total value locked (TVL) in less than a week.

However, it’s worth noting that Plasma is currently heavily incentivizing TVL with XPL rewards, so the sustainability of its growth will likely depend on the token price in the days and weeks ahead.

yyctrader, degen in chief at The Defiant

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🎬WATCH

$100 Million DeFi DAT Chooses ETH | Ryan Zurrer

On the latest episode of The Defiant Podcast, Vinny sat down with crypto pioneer Ryan Zurrer to explore the strategy behind Game Square, the Jerry Jones-backed media powerhouse that bet $100 million on Ethereum instead of Bitcoin.

Ryan, who co-wrote the MakerDAO whitepaper and now leads Dialectic, shares why Ethereum dominates 5 out of 6 real-world crypto use cases, from stablecoins to DeFi, and how it’s emerging as the financial substrate of the future. The conversation dives deep into the evolution of DeFi, the lessons learned from past crypto cycles, and the importance of decentralization and fair launches in building sustainable ecosystems.

Top News in the Past 24 Hours

• Anchorage Digital Integrates Jupiter into Porto Wallet Crypto platform Anchorage Digital announced that it has integrated Jupiter – a Solana-based swap and liquidity aggregator – into its institutional wallet Porto. Why it matters: The integration lets institutional users execute Jupiter swaps directly from the Porto dashboard, without the need to access external dApps.
• Starknet Unveils 100M STRK Initiative to Bring Bitcoin DeFi to Its Network Ethereum L2 Starknet announced several new initiatives aimed at expanding Bitcoin’s use in DeFi, including BTC staking on the L2, an institutional-grade BTC yield product, and a 100 million STRK incentive program. Why it matters: Starknet called the initiative the “first fully trustless BTC staking on any L2” and it is a move toward the network’s goal of becoming Bitcoin’s execution layer.
• SocGen’s Crypto Arm Deploys Euro, Dollar-Pegged Stablecoins in DeFi French banking giant Société Générale’s crypto arm, SG-FORGE, is expanding its stablecoin offerings into DeFi via Uniswap and Morpho, aiming to provide what it calls a “complementary approach” for clients. Why it matters: SocGen is one of Europe’s largest banks, while Uniswap is currently the largest DEX by trading volumes, and Morpho is the second-largest DeFi lending protocol.

Trending on The Defiant

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