XPL, the native token of the blockchain-based neobank project Plasma has climbed by almost 30 percent over the last 24 hours. The dramatic rise in the token’s price is largely being attributed to the launch of the highly-anticipated Plasma One super-app.
Plasma One rollout propels XPL
On Wednesday, stablecoin infrastructure provider Plasma introduced Plasma One, a neobank app with a Visa-backed card that enables users to transact, earn yields, and receive cashback directly from their stablecoin holdings.
The effect of the rollout was immediate on the project’s XPL token, as it climbed from around $0.095 on Wednesday to $0.0117 in the early hours of Thursday. According to the following daily chart, the token has surged over 93 percent since June 10.
The real catalyst behind the rapid appreciation in XPL’s price is the demand created through the Plasma One card. The card offers 3 tiers – Lite, Core, and Platinum – where access to the highest membership tiers requires users to hold or lock XPL tokens.
The lock mechanism serves as a direct utility sink, potentially reducing the circulating supply of XPL if adoption grows. It can be compared to the tokenomics deployed by Crypto.com for its CRO token.
As far as benefits are concerned, the Platinum tier offers 4 percent base cashback, 10 percent cashback on AI spends, and more. To subscribe to this tier, users are required to lock 100,000 XPL tokens for 12 months.
Notably, internal USDT transfers within the Plasma One app carry no fees. Plasma One claims to operate in more than 150 countries, and is accepted by millions of merchants around the world.
What are the risks involved?
While Plasma One aims to create demand for the XPL token, it is not without trade-offs. For instance, all cashback rewards are paid in XPL tokens, which could create sell pressure if the user cashes out immediately.
Similarly, there are some questions pertaining to the total token supply. Currently, only 1.8 billion to 2.5 billion tokens are in circulation out of total supply of 10 billion tokens, effectively implying that more than 70 percent of the XPL tokens are yet to hit the market.
In related news, on May 6, crypto card entity Figo announced the expansion of its offering across 50 new countries.
